First, the moment that TurboTax detected excess HSA contributions, TurboTax automatically added that amount to Schedule 1 IF the contributions were done through an employer (as yours seem to have been).
So you do not need to do anything to accomplish this. Have you already filed your return (I hope not)? If not, please remove that $178 delta from Schedule 1.
This happens because taxpayers read the IRS instructions literally - you can't contribute to an HSA when you are covered by Medicare. But that's not how it works. How it works is that your annual HSA contribution limit is calculated by the number of months you had HDHP coverage with no conflict (in your case, Medicare). So, if you had Self-only coverage Jan through Sept, that would be ($4,150 + $1,000) times 8 months divided by 12 months, if I counted on my fingers and toes correctly.
It does not matter to the IRS in which months you made these contributions; indeed, the software is written such that had you made the entire contribution in November, if the sum of the contribution ($4,400 in your case?) was less than your calculated HSA contribution, that would be fine with the IRS. Note that neither TurboTax nor the IRS ask you which months your contributions were in.
So TurboTax correctly calculated your excess to be $537. That should appear on Schedule 1 of the 1040. Please don't worry about tweaking your return - TurboTax already took care of it.
As for the earnings on the excess, the HSA custodian SHOULD (not all are willing) calculate your earnings on that amount. Then you will be sent a 1099-SA form from the custodian, to show the amount of the excess (which won't be taxed again), and the earnings (which will be taxed). This form will arrive anytime between now and before January 31, 2026. This form gets added to your 2026 return.
Oh, one more thought. Since you requested a withdrawal of $715 which you thought was the excess, you will need to enter the 1099-SA and show that part of it ($537) was an excess contribution and the balance ($178) was a distribution not for medical expenses, which will be added to Other Income as well as would have been hit with a 20% penalty except that you are 65+.
For anyone else reading this, this is a good reason not to assume that you know the amount of the excess. Even if you think you do, just defer it until you start your tax return and let TurboTax figure it out.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
