You would normally be asked that if you entered a Form 1099-A in TurboTax and indicated you took a distribution from your HSA account. The distribution amount would be listed in box 1. In any case, you can indicate that you spent the money on medical expenses and the distribution will not appear on your tax return. Also, you can delete a form 1099-A entry if made in error as follows:
1. Choose the Tax Tools option on your left menu bar
2. Choose Tools
3. Choose the Delete a form option under Other Helpful links
4. Find the Form 1099-A entry in the list and click on the option to delete it
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