Entering this conversation late, but having the same problem. In my case, after following the advice to alter the 1099-R to include insurance, there is no change to the taxes. To get the taxes correct, I have to say that I contributed 8100 to my HSA, which I do not believe is correct, as I did not make an out-of-pocket contribution. In my case, I transferred 140,100 out of my IRA. 8100 went to the HSA and 132000 went to a Roth IRA. The 1099 reports the full 140,100, which they insist is accurate, but only the 132k should be taxable. However, TT is still taxing me on the full 140.1k (unless I key in the 8100 in the "Did you fund your HSA" question.) In this case, altering the 1099-R insurance line does nothing except possibly explain where the 8100 came from. My fear is that the IRS will think I transferred 8100 and contributed another 8100 out of pocket, which would flag my return as an overfunded HSA. I am totally stuck on how to proceed and need some help. Thanks in advance.
