Ah, thank you for the update.
In this case, all of the HSA contribution is being added back to CA income, and this is correct.
Yes, I know that you said that this contribution was paid with after-tax dollars, but it wasn't - because when you entered this contribution into TurboTax, it was placed on line 12 of Schedule 1 (1040) as an adjustment to gross income (a deduction in this case). So the contribution is no longer after-tax from the IRS' point of view.
And since the contribution is part of the federal AGI (Adjusted Gross Income) as a deduction and since California starts with federal income and deductions, it needs to be added back on the state return.
This HSA contribution appeared on line 12 of Schedule 1 (1040), right? In that case, the same contribution must be a add-back on the CA return.
P.S. "is a Federal credit" - the HSA contribution is an adjustment to gross income, or, loosely speaking, a deduction, not a credit.
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