If you had a carryover of excess contributions in 2016, then it carries over to 2017 as a "personal" contribution.
Note that the contributions are the sum of what your employer contributed and what you contributed either by payroll deduction or directly to the HSA (including an carryover). I can't tell from your question if your employer also contributed.
Note that the amount on your W-2 in box 12 with a code of W is the total of what your employer contributed and what you contributed by payroll deduction.
If you truly have an excess contribution, then TurboTax will ask you if you withdraw the excess before the due date of the return. If you can do this, do it because it's the simplest to report. The requirement is that you contact your HSA administrator before the due date of the return to request the withdrawal of excess contributions.
On the other hand, there are ways to enter data in TurboTax that may cause TurboTax to think that you have an excess when you don't. Please read the following:
One of the purposes of the HSA interview is to determine
your annual HSA contribution limit.
As you probably know, the maximum limits in 2017 are:
-
$3,400
- individual with self-coverage
-
$6,750
- individual with family coverage
- If the
HSA owner is 55 or older, then you add $1,000 to these amounts.
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 the HSA all 12 months, then
the annual contribution limit is reduced on a per month ratio.
Fourth
, if you had a carryover of excess contributions from 2016, then
this carryover is applied to 2017 as a personal contribution, which could cause
an excess condition in 2017 as well. But
note: if you had an excess contribution in 2016 but cured it by withdrawing
the excess in early 2017, then do NOT report an "overfunding" on your
2017 return.
