How do I properly test for a rejected promise using Jest?

You should do something like this:

it('rejects...', () => {
  const Container = createUserContainer(CreateUser);
  const wrapper = shallow(<Container />);  
  return expect(wrapper.instance().handleFormSubmit()).rejects.toEqual('error');
});

I think it is cleaner this way. You can see this approach in the official docs.

It’s important to note that .rejects (and .resolves) returns a promise, which is returned in the example above so that jest knows to wait on it. If you don’t return it, you MUST await it:

it('rejects...', async () => {
  const Container = createUserContainer(CreateUser);
  const wrapper = shallow(<Container />); 
  await expect(wrapper.instance().handleFormSubmit()).rejects.toEqual('error');
});