When you spoke to Optum, did you ask for a return of "excess contributions"? This is important so that the paperwork coming out subsequently will be correct.
Note that Optum has "an Excess Contribution and Deposit Correction Request Form" to have excess funds returned to you available online after you log into your account (a fast way to do it if this happens again).
When you get into TurboTax, enter the W-2 exactly as is, with the $10,175 in box 12 with code W.
Then go to the HSA interview (Federal->Deductions & Credits->Medical->HSA MSA Contributions). When you go through the interview, eventually TurboTax will realize that there were too many HSA contributions for the year, and it will announce that you have excess contributions of whatever it is.
TurboTax will ask you if you are going to withdraw the excess contributions by the due date of the return. Answer "yes" because you have already started the process.
TurboTax will add the excess to line 8 (Other Income) on Schedule 1 (1040) (assuming that this excess was from the code W). Finish the HSA interview and the rest of the return - you are finished with the excess for the current tax year.
For the next tax year, Optum will send you a 1099-SA reporting on the excess contribution and its earnings with a distribution code of '2'. The distribution won't be added to your next return (because it was already added to the current tax year), but the earnings will be added to the next tax year. This is because the earnings were earned in a period while the excess was inside the HSA, and this period probably spanned both the current tax year and the subsequent tax year - so it's reported for the subsequent tax year.
Do all this, and you will be done with the excess...
[Edited 3/10/2020 3:19 pm CDT - made year-neutral]
