clschaaf
Yes, TurboTax automatically assumes that all medical expenses were paid in the current year. The IRS introduced a conundrum when they said that you could repay yourself for older medical expenses, so long as they were incurred after the start of the HSA.
As you see, TurboTax automatically adds back the entire 1099-SA amount that is used for medical expenses.
But since CA surely allows only current year expenses. So do this:
On the screen that says "Here's the Income that California handles differently", go to the bottom and click on "Other Adjustments to Income".
Here you can do the necessary adjustments. Remove the multi-year distribution and subtract out the current year medical expenses.
The amount of the 1099-SA that was actually for medical expenses will appear on line 4 in Part II as an addition. If you want to remove only the current year expenses, then take the difference of the current year expenses in that 1099-SA and the prior year expenses, and enter them as a subtraction, so that the prior year medical expenses will not appear as a current year expense in CA,
I hope that makes sense.
@clschaaf
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
