Deductions & credits

When TurboTax tells you that you have an excess contribution, TurboTax adds it automatically to Line 21 (Other Income) on your 1040. You don't have to do anything.

This is because the IRS says that excess contributions cannot be subtracted from income. But if you had a code W in box 12 of your W-2, then the entire contribution (including the excess) was subtracted from Wages before the W-2 was printed. Therefore, TurboTax adds back the excess amount so that your income is the correct amount.

Your HSA administrator is correct that they will send you the 1099-SA in early 2019. Although the excess amount will be on the 1099-SA, because the form will have a code of '2' and not '1', it will add only the earnings of the excess to your income next year.

This is all as it should be.

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