I went back to the way I entered my 1099-R form in federal. I did not go with bullet #2 for screen #1 as I did originally. I am now seeing a much different set of selections. Since 75% of my 1099-R distribution was cash, I originally picked bullet #2. Following your suggestions, I chose bullet #1. I followed with your recommendations for the next bullets. Turbo tax is treating the portion I put into my HSA different, and I am getting more money back from both federal and state. The issue with California state taxes is I am still getting a 3805P early distribution for the portion I rolled over from my IRA into the HSA, but California is giving me more money back in spite of the 3805P form early distribution penalty of 2.5%. The only question I have is: The money I rolled into the HSA came from an IRA established years ago. The wording for some of these bullets are confusing. The subject wording makes me feel that I contributed to an IRA and then that money went to the HSA, and everything happened in the same year? Are we getting a double credit for the conversion? Thanks for your help.
