The issue is that excess contributions need to be withdrawn by the due date of the return - in this case, April 15, 2024.
Since you did not do that, the excess in 2023 carried over to 2024. TurboTax tried to apply the carryover excess to line 2 (8889) as a "personal" contribution, but many taxpayers do not realize this so when they continue to contribute large amounts, they just create a new excess. But when they try to withdraw the new excess, TurboTax will stop them because in the next year, they cannot withdraw the carryover excess penalty-free.
So, how to stop it? When you enter the 1099-SA for your withdrawal of the excess on your 2024 return, then say that it was NOT for medical expenses. TurboTax will add the box 1 amount to Other Income, and add a 20% penalty, but at least the excess will be over and done with.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
