I have two kids and a HDHCP for myself and them (a family plan). Last year I got married, and my wife maintained her individual HDHCP. My employer contributed the maximum amount into my HSA ($7300) and my wife's employer contributed the maximum amount into her HSA of $3400.
In Turbotax I correctly indicated that I had a family plan, and my wife has a self plan, yet Turbotax indicates I've overfunded my HSA by $3400. This implies that my wife should be on my family plan and hence the $3400 into her HSA was "overfunding".
Is there something in Turbotax that I need to select to fix this? Or, is this the correct way to handle the taxes?
Thanks in advance.
It depends. If you are going to withdraw the excess contribution you need to indicate that in the HSA interview screen. Both you and your spouse may have separate HSA accounts, but the family contribution limits apply to both plans. The family limit of $7,300 (to be allocated between both plans) applies to both spouses. Please review the IRS website HSA Limits on Contributions - Rules for Married People.
You may request a withdrawal by April 17, 2023, of the excess contribution to avoid a penalty. Please review the TurboTax Help article Why am I showing an excess HSA contribution? for additional information and instructions. Please note, that if you are going to request a withdrawal of the excess contribution, answer No to the question Did you overfund your HSA in 2022? in the HSA interview.