The way this works is this:
Any HSA contributions made by your employer or through your employer by means of payroll deduction) are removed from Wages in boxes 1, 3, and 5 on your W-2 before your W-2 is printed. This means that your entire contribution is deducted right up front.
But excess contributions are not allowed to be deducted, so the excess amount is added back to line 8 of Schedule 1 (1040) automatically.
Did you withdraw the excess and the earnings before July 15, 2020? If so, then you did not carry over the excess and should not have paid the 6% penalty.
Did you have a form 5329 on your 2019 return? Did you have an amount on line 49 of the 5329?
In the HSA interview, did you answer "Yes" when you were asked if you overfunded your HSA in 2019? If you withdrew the entire excess by July 15, 2020, then you "cured" the excess and should answer "No". The question doesn't want to know if you had an excess but only if you carried it over to 2020.
"2020 TURBOTAX HOME AND BUSINESS IS ASSIGNING THE AMOUNT I PUT INTO MY 401K - BOX 12 CODE AA 1209.38 - AS CONTRIBUTIONS TO HSA ."
I have never seen TurboTax do this - something else must be happening.
So come back and tell us when you withdrew the excess, because your story is missing something.
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