@alexandra11
I am mystified as to what that NY line is referring to. I can reproduce the line your are seeing ("Taxable HSA Distribution") only by creating a taxable HSA distribution on the federal return. However, this should have created at least an entry on line 16 of the 8889, which you say isn't there.
So, if you are game, let's try this.
Delete all your HSA data on the federal return, re-add it, then run through the New York interview again. Perhaps at some point there was a taxable gain which snuck into New York, but now it's not on the federal return, but New York has not forgotten.
***HSA Reset***
1. make a copy of your W-2(s) (if you don't have the paper copies)
2. delete your W-2(s) (use the garbage can icon next to the W-2(s) on the Income screen)
*** Desktop***
3. go to View (at the top), choose Forms, and select the desired form. Note the Delete Form button at the bottom of the screen.
*** Online ***
3. go to Tax Tools (on the left), and navigate to Tools->Delete a form
4. delete form(s) 1099-SA (if one), 8889-T, and 8889-S (if one)
5. go back and re-add your W-2(s), preferably adding them manually
6. go back and redo the entire HSA interview.
After this, run through the New York interview, and see if that Taxable HSA Distribution is still there.
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