Did you contact the HSA custodian to request the distribution? If you did, then the HSA custodian would send you a 1099-SA reporting the distribution.
You would enter the 1099-SA and then tell TurboTax that none of the distribution was for medical expenses (this is a question in the 1099-SA sub-interview). When you do this, then the distribution will be added to Other Income and 20% penalty added as well...but the carryover will be cut off at last.
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