TurboTax says I over-contributed to HSA when we invested less than we were allowed to

[vishallvshah]

Hi all,

For the year 2023, I had an individual HDHP plan and my wife had another HDHP plan with our kids. Which means that everyone in the family had only one HDHP plan for the entire year. Therefore, across both of us we should have been able to invest $3,650+$7,300 = $10,950 in HSA. In actual, we invested on $9,971 in HSA in that year, so we were under the official limit.

However, TurboTax is saying that we over contributed to our HSA by $2,580. When selecting the type of HDHP plans in TurboTax it only gives two options - Self plan and Family plan. My understanding is it thinks we over-contributed to HSA because it considers that I was part of my wife's family HDHP plan.

Please guide me as to how I can fix this problem or tell me if my assumption is incorrect and there is a different reason why it shows over-contribution

[dmertz]

You are mistaken.  When one spouse has family HDHP coverage and the other spouse has self-only coverage,  the tax code treats both spouses as having family coverage subject to a single $7,750 contribution limit for 2023.  The $7,750 contribution limit can be split between the spouses individual HSAs in any way that they chose.  (You quoted the 2022 contribution limits.)

TurboTax saying that you have a $2,580 excess contribution implies that you have told TurboTax of $10,330 of HSA contribution between the two of you, not $9,971.  If you contributed only $9,971 between your two HSA accounts, you would have an excess contribution of only $2,221 (unless you also had an excess of $359 carried in from 2022).