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Since nobody replied to my last question/comment, I will reply myself just in case I can help anyone else who has this problem.    For some reason, on my computer screen, the Edit and Delete buttons are INVISIBLE.  If you slowly run your cursor over where they should be, a nearly invisible outline shows up.  Once you learn which is which you can proceed carefully to click where the buttons ought to show up.

The excess contribution was indeed added as Other Income on Schedule 1 (1040), but our tax due was not affected.   So if I understand correctly, the excess contribution that has been refunded will not be taxed until the 2026 tax year?  Correct?

Thank you so much for your very prompt response. Sorry for the confusion about the 1099-Int. When I said "c. NOT included on any 1099-Int as interest income." I was referring specifically and only to the $349.62 Accrued Interest. There were, indeed, 2 regular interest payments made directly to my account by the government -- I wasn't confused about them, but should have mentioned them. They were both for $843.75 and were paid to me on 5/15/2025 and 11/15/2025, and were definitely included in my 1099-Int from this broker as part of box 3 "Interest on U.S. Savings Bonds and Treas. Obligations". which TT understandably and correctly turns into a negative interest adjustment on my CA return. I also apologize for misstating the disposition of the Note. It did, indeed, mature, and you are right on in guessing that was so! I was just in the buy and sell mindset of brokerage transactions...... I was still a bit confused in that my brokerage 1099-B Box 1f is labeled "Accrued Market Discount" and contains the aforesaid "Market Discount" of $1,157.25.The label TT uses for Box 1f in the interview is "Accrued INTEREST included in proceeds (market discount). I thought that was 2 different things. Anyway, after I enter the $1,157.25, TT asks me if "the accrued interest on this bond is reported in 1099-Int. Well, as I said, the $349.62 was not, so I left that unchecked. But on the next screen, TT summarizes that transaction and says the gain/loss is $0.00. I didn't understand this at all until I read your paragraph (repeated here for emphasis): ----- Turbotax will enter the sale onto Form 8949 with an adjustment which will zero out the gain/loss on Form 8949 and Schedule D, and transfer the AMD as ordinary income to Schedule B (AMD is taxed as ordinary income to the extent of the gain/loss - see IRS Pub 550). You will see it as a line item on Schedule B with the description and "Accrued Market Discount". ----- Sure enough, that looks exactly like what happened, and it seems to make sense. I think I understand this a lot better now and, once again, thank you for your prompt response.  

Follow these steps: Look at your Federal Form 4562 (Depreciation and Amortization). Check Line 14 (Special depreciation allowance) or Part I (Section 179). If there is a number there, that is your culprit. Check your Depreciation Asset Report. Look for any asset that isn't the "Residential Building" (27.5-year). If you see an asset with a "Special Allowance" or "179" column, that $222 is the adjustment to bring that asset back to DC's "slow" rules. Here's why: Federal may have applied a 60% or 40% "Bonus" depreciation to 5-year and 15-year assets automatically unless you specifically checked a box to "Elect Out." If you bought a $500 lawnmower or a $1,000 fridge, TurboTax might have applied Bonus Depreciation to it on the federal side. DC rejects that bonus. The $222 is likely the difference between the "bonus" you got on federal and the "slow" depreciation DC requires.

Is this income related to the department that you retired from, or is this more like a side gig in retirement?   If the latter, then you will have to enter this as "business income", which will allow you to take deductions if you have any. You will also be charged self-employment taxes.   Note that entering business income and expenses is not available in Basic, and the ability to more completely enter your income and deductions increases as you go up to Deluxe through Premier then to Home & Business (please excuse me if the names of the versions vary - some of them have changed this year. Note that this really applies to the TurboTax Desktop version - I think were version you are using is more opaque in the Online product.   Note that you don't have to have a 1099-NEC or 1099-MISC or similar form to report income for your side gig; you can enter data without a form in the TurboTax interviews.

Note that If I try to set the sale to collectable by overriding column (f) Code(s) on form 8949, TurboTax generates an error saying:    Form 8949 (Copy 2): Transaction Code (ST) should not be overridden and changed for Electronic Filing. Using an override can prevent the cross-checking that's important to an accurate tax return. To cancel the override, click on the overridden field and choose 'Override' from the Edit menu.   I expect this will prevent me from filing. Ugh.

Hopefully you have Deductions and Credits under Federal on the menu down the left, select the Deductions & Credits Summary; it may ask some pending questions if so answer those, you'll eventually get to a summary page and an option to "add more tax breaks", then scroll down to the Estimates and Other Taxes Paid section - may look something like this...    

Thank you dmertz for the clarification. Indeed the original question of Roth  conversions was still in play, but as you pointed out, the aforementioned part of the code I had referenced applies to transfers and not rollovers. Thanks again!

If you were using TurboTax, then if the excess contributions came through your employer (i.e., the code W amount in box 12 on your W-2), the moment that the excess is discovered by TurboTax, TurboTax will add it back to Other Income on Schedule 1 (1040). Check for yourself. You don't have to do anything to make this happen.   If the excess contributions were "personal" contributions (i.e., NOT through your employer), then TurboTax would just reduce the amount on line 13 of Schedule 1 (1040) by that amount.   The HSA administrator should send you a 1099-SA for this distribution for excess contributions, but you don't enter this until early 2027 on your 2026 return. Since the excess was already added back automatically, the 1099-SA with a distribution code of '2' doesn't have to do anything with it (in fact, when the distribution code on the 1099-SA is '2', the box 1 amount (excess contributions) is ignored. Only the earnings in box 2 will be added to your return in 2026.   Yes, this is confusing, but TurboTax is handling it correctly.

You can remove it as an asset and enter it directly as an expense. You won't see a place to add the election under regular expenses. Because it is a minimal expense, it is just added in. Keep your receipts and a note about taking the de minimis election. Great research!  

A house is "available for rent" on the day you are looking for a tenant, not necessarily on the day that a tenant moves in.  If you were hunting for a tenant - and paying realtors to do it for you - then the house was available.     You need to amend your 2024 tax return and change the number of days that the house was available to the day that you were ready to have someone move in.  You will then be able to deduct eligible expenses.