Well perhaps this is the answer- from 3805P Instructions:
"Effective for taxable years beginning on or after January 1, 2007, the IRS allows a one-time rollover from an IRA to an HSA. California does not conform to this provision. Under California law any distribution from an IRA to an HSA must be added to adjusted gross income (AGI) on the taxpayer’s California return and would be subject to a 2½% additional tax under the rules for premature distributions under IRC Section 72."
But "would be" seems to mean if under 59.5, so Turbotax still hasn't fixed this despite multiple posts from multiple years. So the work around for me is to go to Form 3805P in the Forms mode and add 8750 to the non-simple box in the smart worksheet for line 2 and use 99 as the exception since non of the others are appropriate. It does not offer me an option in the interview mode in Mac version.
