My wife does not have a separate plan of any kind. It's only my plan through my employer that covers our whole family. It appears to be assuming it's a single person plan and I've overcontributed. If I check my spouse as having HSA, too, then it assumes she has a different plan?
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Actually, the maximum for a Family HPDP policy is $6,900, not $6,850, but this confusion was caused by the IRS publishing $6,900, then changing it to $6,850, until finally resetting it to $6,900, where it stands now.
NOTE: it is the HDHP health insurance policy that is the Family plan. HSAs are always owned by an individual, even though you can pay expenses for your spouse and dependents from your HSA.
There are a number of factors that go into determining what your annual HSA contribution limit is. Evidently, TurboTax is not calculating for you the maximum HSA contribution limit for someone with the Family HDHP policy.
The following is a lengthy list (apologies), but they are all causes of excess contribution error messages:
One of the purposes of the HSA interview is to determine your annual HSA contribution limit.
As you probably know, the maximum limits in 2018 are:
However, these limits assume that you were in an HSA all year. If you left the HSA during the year or started Medicare or had one of a number of change events, then the limit is reduced.
There are several major culprits for excess contributions (other than just actually contributing more than the limit).
First, if you did not complete the HSA interview - that is, go all the way until you are returned to the "Your Tax Breaks" page - the limit still might be set to zero, causes a misleading excess contribution message.
There are questions all the way to the end of the interview that affect the annual contribution limit.
Second, it is not unusual for taxpayers to accidentally duplicate their contributions by mistakenly entering what they perceive to be "their" contributions into the second line on the "Let's enter your HSA contributions" screen (see screenshot below).
Normally, any employee who made contributions to his/her HSA through a payroll deduction plan has the contributions included in the amount with code "W" in box 12 on the W-2. This is on the first line on this screen (above). Don't enter the code W amount anywhere on the return other than on the W-2 page.
Third, if you weren't in HDHP coverage all 12 months, then the annual contribution limit is reduced on a per month ratio. NOTE, this means that you have to indicate when and under what type of HDHP plan you had. Be sure to answer the questions on the screen entitled "Was [name] covered by a High Deductible Health Plan in 2018?" (see screenshot below).
Fourth , if you had a carryover of excess contributions from 2017, then this carryover is applied to 2018 as a personal contribution, which could cause an excess condition in 2018 as well. But note: if you had an excess contribution in 2017 but cured it by withdrawing the excess in early 2018, then do NOT report an "overfunding" on your 2018 return.
Fifth, the Family limit ($6,900) is for the aggregate of contributions by both taxpayers, even if both taxpayers have their own HSAs. That is, one taxpayer can’t contribute $6,900 to his/her HSA and the other contribute $3,450 to the other HSA – the $6,900 limit applies to the aggregate of all HSA contributions credited to the family (in this case, the excess contributions would be $3,450).
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