"I did test adding 0 as a year-end value, which would change the total distribution value in the HSA summary page at the end of the interview and result in a lower tax liability. So somehow my year-end value was considered as a distribution (on top of my actual distribution) by turbotax. "
This does not make sense. I do not know how the ending HSA value could be considered an HSA distribution.
Upon rereading your initial post, I see that you did take distributions from your HSA in 2024, so you are required to add form 8889 to your return. You do that by going through the HSA interview.
OK, I think I see what happened. You had a carryover of excess HSA contributions from some prior year. Because you did not have HDHP coverage in 2024, this carryover - which is treated as a personal contribution (line 2, form 8889) - in the next year, caused an excess contribution in 2024 as well.
Since you did not "cure" this carryover in 2024, it created another carryover of excess contributions to 2025. This new carryover is charged at 6% of the smaller of the carryover or the value of your HSA at year-end (hence the question about the value of the HSA).
So let me know if this matches your case.
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