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The issue is that the HSA process as described by Congress and the IRS is very obscure and uses words in confusing ways. The result is that the HSA process doesn't work the way that most taxpayers think it does. This results in taxpayers thinking that TurboTax is coded wrong, when in fact it is operating correctly.   For example, when you thought that you had withdrawn the excess contribution, you did not do it in the way that the IRS prescribes, so the excess continued to roll on.   This is poorly explained by the IRS (see IRS Pub 969), but once you create an excess that gets carried over, you can't fix it by withdrawing it (but see below). TurboTax tells you that you have an excess, but when you try to withdraw it, TurboTax will say it can't be done, and it is not at all clear why not.   Original Year When you have an original excess, you have two choices: * withdraw the excess without penalty ("withdrawal of excess HSA contributions" by the original due date or extension, distribution code of '2') * roll the excess to next year with the hope that you can use it as a contribution next year    But when you pass the original due date (or extension date), the first option (withdrawal) is gone. After the original due date (or extension date), you now have these choices:   Subsequent Year * withdraw the excess as a normal distribution (code '1') - this will not only be taxed as ordinary income, but will also be hit with a 20% penalty. * roll the excess to next year with the hope that you can use it as a contribution next year (but if you have changed insurance carriers or maybe gone on Medicare, it might never be usable again).   So when TurboTax tells you that you have an excess of $19 for 2022, since you have passed the original due date (April 15, 2023), you could do this: 1. If you will have HDHP coverage next year, make sure that you can include the excess as a personal contribution under your Family contribution limit (i.e., reduce the contributions you would have otherwise made). 2. Keep the 1099-SA with its code of '1', change it so that it is not marked as all for medical expenses, then accept the fact that the distribution amount will be added to Other Income on Schedule 1 (1040) and the 20% penalty will also be added to Schedule 2 (1040).   However, you chose to roll the $19 over to 2024 and then 2025, and I assume that you never had HDHP coverage again, so the $19 was never used up.   When you "withdrew" the $19, you told the HSA custodian that it was something like a withdrawal of excess HSA contributions, so they sent you a 1099-SA with the distribution code of '2'. But this is the correct procedure only if you do the withdrawal in the first year (i.e., before the first due date). Unfortunately, in common English, we use "withdrawal" for any removal of dollars from the account, whereas the IRS uses "withdrawal" in a very specific sense - to remove the excess in a timely manner in the year current with the excess (well, up to the original due date of that tax year).   Don't blame the HSA custodian - they don't know any better.    Now that you are beyond the first year (and its original due date of April 15, 2023), you have to proceed to "Subsequent Year" above. You apparently don't have bullet point 2 available to you (using up the rolled over excess as a personal contribution in a future year). So the only method you have available to you to cut off the continuous carrying over of the excess is to take a distribution from your HSA (distribution code of '1') equal to the amount of the excess, and not marking it as used for medical expenses.   This action will result in the excess being add to Other Income on Schedule 1 (1040), as well as a 20% excise tax ("penalty") added to Schedule 2 (1040). But then, the carryover will be done. Such a distribution cuts off any carryover without you making any special entries.