"Shouldn't the max limit for the joint HSA" - there is no such thing as a joint HSA, even though it seems like there is. An HSA belongs to an individual, similar to an IRA. The $1,000 catch-up contribution limit belongs to the HSA, so if you each have HSAs, then you each get the $1,000 increase - but only for your HSA. That is, If you had Family coverage all year, you might think that the ultimate limit was $9,000 ($7,000+$1,000+$1,000) but this is true ONLY if at least $1,000 goes into each HSA. You could not contribute more than $8,000 to any single HSA.
The calculation for the HSA contribution limit is done like this:
While you are both under Family HDHP coverage (if either one of you is, then you both are), then you share the $583.33 per month limit. In addition, as taxpayers who are clearly 55 or over, you get $83.33 additional limit to apply to your own HSA.
First, please ignore the numbers that TurboTax gives you when you press the "Calculate Max Contribution Limit" button. The number is calculated without regard to the other spouse (whose information you may not have entered yet). It is not correct to think that you each have a limit in excess of $7,000 even though that is what the software might imply.
The issue is that the Family HDHP coverage limit needs to be allocated between the two spouses, and that is not done until later in the HSA interview.
As for your 2019 HSA contribution limit, it is 11* $583.33 plus 11 * $83.33, or $7,333.26. The fact that TurboTax came up with $7,334 is the annoying result of rounding errors.
When you entered your spouse's HDHP coverage, you should have entered that she had Family coverage for Jan through Nov, if she was listed on your HDHP policy.
For 2019, the calculation would depend on how much of the Family limit (the $7,000) you used, because as you know, you two share the limit of $7,000. If you took all of the $7,000, then her limit for 2019 would be one month of Self-only, i.e., $291.67 plus 12 months of the catch-up ($1,000) or, $1,291.67.
If, however, you did not need all of the $7,000, then some of that could be transferred to your spouse's 8889 to add to her limit.
Yes, your wife could have made a full year contribution in Dec 2019 because of the "last-month" rule which allows a taxpayer who has HDHP coverage on December 1st, to use the full annual HSA contribution limit.
But since you know that she will drop HDHP coverage in March 2020 so will fail the testing period, there is no point in doing that.
As noted above, her limit for one month in 2019 is $375, and for two months in 2020 will be 2 months at $295.83 (the base limit for Self is increasing to $3,550 in 2020), and still $83.33 for the catch-up for the 55 and over. This makes a total of $758.33 for her limit in 2020.
"After all, the rule is that I and my wife each has a max of $1,000 for catch-up." - yes, but it is calculated the way I show above. AND, your wife would have to have her own HSA (which it sounds like she did in December 2019).
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