1099sa Med Savings accnt ??. I entered the values from box 1 and 3 (normal distr). The TTax added 50% of box 1 my fed tax owed. HSA should be tax free. please advise.

TTax premier is taxing me on HSA expenditure reported on 1099-SA form. for example I reported $2,000 on box 1 and selected normal distribution in box 3. I don't expect to pay $1,000 tax to Feds on this amount. What's up?

Regards