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Do you mean that this distribution is actually a rollover to an HSA from a traditional IRA?
After you enter the 1099-R into TurboTax (and, yes, distribution code of '7' is OK), then TurboTax will ask "What did you do with the money from (this 1099-R)?"
Answer "I did something else with it".
The next screen will ask if you put this money into an HSA. It's likely that the screen appears only after you've indicated that you have an HSA (either code W in box 12 of your W-2 or by going to the HSA interview (Federal->Deductions & Credits->Medical->HSA MSA Contributions) and checking the box).
Note that is valid if you received the money then redeposited it within 60 days into your HSA. If this had been a trustee to trustee transfer, I don't think you would have gotten a 1099-R.
After entering in the data for my 1099-R and answered "I did something else with it", I do not see a prompt asking if I put this money into an HSA. I am using TTAX Deluxe 2019. Is the one-time rollover from IRA to HSA supported by Deluxe?
@Imv2oD0xBiI9 wrote:
After entering in the data for my 1099-R and answered "I did something else with it", I do not see a prompt asking if I put this money into an HSA. I am using TTAX Deluxe 2019. Is the one-time rollover from IRA to HSA supported by Deluxe?
The question is asked for an HSA if the withdrawal was from an IRA. Is the IRA/SEP/SIMPLE box checked on the Form 1099-R?
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