It's unfortunate that you missed completing the HFD testing period by less than a month. Failing to meet the testing period does not make it an excess contribution, but it does make the HFD taxable and subject to a 10% penalty on your 2017 tax return.
TurboTax doesn't have a separate question for failing to meet the testing period for an HFD. However, this is treated the same way as failing to satisfy the testing period for the last-month rule. In
2017 TurboTax you'll indicate that you made a contribution under the last-month rule and that your entire HFD amount was
Excess Contribution Amount Using the Last-Month Rule. ("Excess contribution" here is a misnomer, even in the case of actually using the last-month rule.)
You might consider reporting this as a regular taxable distribution from your IRA, subject to the 10% early-distribution penalty, and a regular deductible HSA contribution under the last-month rule. This would allow you to pay tax and an additional 10% penalty only on the portion of the contribution for the first 3 months of 2016 that you were not eligible for an HSA contribution. Paying 10% penalty on the entire distribution from the IRA plus tax and 10% penalty on only the additional HSA contribution made under the last-month rule could be less than paying tax and penalty on the entire amount of the HFD.
