Thanks for the response! I see that TurboTax has automatically added the HSA to my California income, which makes sense. However, TurboTax has also removed the excess contributions (I have successfully withdrawn them, but again, this happened in Arizona) from California, so the only amount included now in the HSA is the non-withdrawn portion. I believe it copied this from the federal return.
I understand that California taxes that (and interest - which I've handled separately), but it's not clear to me whether that amount (the excess amount only) should be deducted from California. It seems as though TurboTax removes that withdrawn amount from the California HSA adjustment and expects me to apply it as part of my AGI. Normally (ie in a one state case), it seems like the AGI from the federal return (which already includes the HSA excess contribution funds returned to me) would take care of carrying it over to California (other adjustments - such as the non refunded portion of the HSA - would happen after). (Also, please correct me if I'm wrong here - TurboTax automatically removed the refund from my California HSA contribution line and included it in AGI. Please do let me know if this is expected behavior!) In my case, though, I'm asked to split up the AGI between two states. My question is whether that excess contribution refund portion of the AGI should be counted as California income or Arizona income.
Or is it the case that the only part that matters as far as California is concerned is what I originally funded with (ie the refund makes no difference to California)?
And then that raises another question - is it possible that this is taxed by both states?
