When preparing Schedule A, 2023 TurboTax automatically subtracts from the itemized medical expenses the amount that you report as medical expenses paid with the HSA under the assumption that the medical expenses paid from the HSA were ones incurred in 2023. Because the HSA distribution was instead applied to prior-year medical expenses for which you took no deduction, in 2023 TurboTax you must enter as 2023 medical expenses the amount that was paid from the HSA. Enter this as other medical expenses with a description such as "Prior-year medical expenses paid with an HSA distribution."
