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I see, if the asset is still in use, then recapture will happen - that makes sense.   What happens if an asset is no longer in use when the property is sold? For example, if a storage shed was removed from the rental property and moved to the owners main residence while the rental was being remodeled and put up for sale?

The right way to fix this is to contact the HSA custodian and report that the $969 withdrawal was a "mistaken distribution". If they accept this, they will make you complete a form (probably online) and you will have to send them the $969 back.   Note that they don't have to accept this, so be nice (grovel if you have to).   Then, at the same time (and before April 15th), you will need to ask for a withdrawal of excess contributions in the amount of $218 (didn't TurboTax tell you $218 and not $219? - maybe there is a rounding error in the numbers you gave me).   If the HSA custodian refuses to accept the request for a mistaken distribution, then you are left with the following:   1. Split your 1099-SA into two 1099-SAs (that is, you will enter two of them). 2. On one 1099-SA, you will enter $218 for the distribution and a distribution code of '2'. You will also have to calculate the earnings on this excess and enter that in box 2. If they put the earnings on the 1099-SA that you will receive, then prorate the earnings on this 1099-SA by 218/969. 3. On the other 1099-SA, enter $751 as the distribution code and '1' as the distribution code. There are no earnings to enter. 4. The second 1099-SA will add $751 to your Other Income on line 8f on Schedule 1 (1040), and a 20% penalty of this distribution on Schedule 2 (1040).   Use 219 above instead of 218 if that is what TurboTax actually told you.   Note that changing one 1099-SA into two increases the risk that the IRS will send you a letter wondering why you did this. This is because the IRS gets a copy of 1099-SA forms.   If this letter comes, just answer it with the simple reason that you withdrew the wrong amount of excess and the HSA custodian would not help you fix it, so you have entered the data on your return to be as correct as possible in terms of income tax and penalties. This means that you need to document what you did and why and stick it with your tax records in case anyone ever asks.   If you have not received the 1099-SA yet, don't worry, they actually don't have to send it to you until early 2027 to be put on your 2026 tax return.

If you decide to mail the return, select the print option for the state return. It will print out the state forms you need. For mailing: Sign and date tax form Include all pages of the of the main tax form Attach forms and schedules, like IT-225 (modifications) or IT-213 (child tax credit) IT-2 - wages summary Do not include worksheets.   Do add a note that you had to paper file since e-filing is not supported with a different status from federal. Include IT 201V if you owe along with your payment OR pay online at Make a payment - Tax.NY.gov Mail certified with no signature required. NY and the IRS share information so NY will know you filed MFJ with the federal.  Check out this article, How do I prepare a joint federal return and separate state returns? NY instructions

Sometimes there are issues with importing multiple 1099s from the same issuer. In that case, import the most complex one and enter the others manually. if they're simple enough, enter them all manually. 

I did file without the 8962 and it was rejected. I just have 2 months that I had a plan on the health exchange and paid the full premium with no PTC, and I’m not eligible for the PTC. My 1095-A has values in Columns A and B for the two months, and column c is $0. I was told by TT customer service that the software won’t populate an 8962 because there is no PTC and nothing due, however the IRS won’t accept the return without Form 8962 since I they have a 1095-A for me. 

Extra question: since it's before April 15, if I make a personal contribution for the year 2025 in the amount of  $3,550 (given the $5000 was withdrawn under code 2 - excess contributions), doesn't it even out?   (Please stop me now if I'm making things worse)   Something like this on form 8889: Total contributions: $5000 + $3,550 (+ carryover $5000 from 2024) Total distributions: $5000 code 2 + earnings on distributions  Total taxable distributions: 0   Totals for the year 2025: $5000  (2024) + $5000 (employer, 2025) + $3,550 (me) - $5000 (code 2) = $8,550 

If you're referring to Rental Expenses you claimed on Schedule E of your Federal return, these don't need to be added back under 'Other Adjustments' in your Arizona Non-Resident return.  The only item from rental activity that may need to be added back is if you added a new Rental Asset, and claimed Bonus Depreciation.  Arizona follows different rules than Federal on this deduction.    Common add-backs include non-Arizona municipal bond interest, bonus depreciation (or specific Section 179 differences), expenses related to tax-exempt income, and state income taxes deducted on the federal return.   Here's more info from State of Arizona on Additions to Income (see page 13).   @jilid 

IRS needs to verify my sons identity on a video call To verify your son's identity for IRS purposes, you can use the ID.me platform, which allows for video call verification. Here are the steps to follow: Create or sign in to your ID.me account: This is necessary to initiate the verification process. Upload a photo ID: A valid photo ID such as a driver's license, passport, or state ID is required. Join a video call: The IRS representative will join the call to verify the identity. Follow the instructions: The representative will guide you through the verification process, which typically includes answering questions and providing additional documents if needed. If you encounter any issues during the verification process, such as being unable to sign in to your ID.me wallet or having trouble with the video call, you can refer to the IRS Help Center for assistance. For more detailed instructions and troubleshooting, you can visit the IRS Help Center or watch a tutorial video on how to use ID.me to verify for IRS access.

@dhurandhar  that is correct.  The carry ( forward/backward) option is available ONLY when form 1116 is used and use  thereof is quite iffy -- more of an asymptotic recovery at best.   Namaste ji