HSA Contribution Under Limit But Still Shows As Excessive

[OutlierZ03]

Hi - In 2019, I changed my job and so for the first 6 months (Jan - Jun 30th), I had coverage with employer X and starting August 1st - Dec 31, I had with employer Y. The reason, I didn't have coverage in July as due to the employer Y policy for all new employees. With both of these employers, I had an HDHP plan and I was making a contribution to the HSA account. 

With employee X, I made a total contribution (reported on Box 12W) of $1313.00 (Jan 1st - Jun 30th)

With employee Y, I made a total contribution (reported on Box 12W) of $5472.41 (Aug 1st - Dec 31st)

Adding up the contributions, I made a total contribution of $6785.41. 

Now, when I am filing my tax return with TurboTax, I saw that I am being charged a penalty for excess contribution to HSA. 

My question is, considering I am filing as MFJ and $7,000 is the limit, why am I being charged a penalty? 

[VictoriaD75]

 In 2019, the contribution limits are $3,500 and $7,000 for self-only and family coverage respectively. For the $7,000 limit to apply, you must have had family health coverage and indicated as such in the software. If you had self-only coverage, you have an excess contribution even if you file jointly.

The most common error I see when entering HSA contributions are double reporting. Typically, these payroll contributions are reported on your W-2 in box 12 with code W. If that is the case, no other contribution needs to be reported in the software.

Under the Deductions & Credits menu, confirm the following:

• Expand the menu for Medical
• Click Start/Revisit next to HSA, MSA Contributions
• Confirm the account ownership and click Continue
• Continue in through the screens until you reach Let's enter your HSA contributions
• Stop here. If all of your contributions were through payroll deductions and reported on your W2, do not enter anything on this screen. If that is the case, either leave the box empty or type $0 in the box next to Any contributions you personally made

If it turns out you did have an excess contribution, the following applies. Generally, you must pay a 6% excise tax on excess contributions. See Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts, to figure the excise tax. The excise tax applies to each tax year the excess contribution remains in the account.

You may withdraw some or all of the excess contributions and avoid paying the excise tax on the amount withdrawn if you meet the following conditions.

• You withdraw the excess contributions by the due date, including extensions, of your tax return for the year the contributions were made.
• You withdraw any income earned on the withdrawn contributions and include the earnings in "Other income" on your tax return for the year you withdraw the contributions and earnings.

Pub 969 Tax-Favored Health Plans