If you have excess contributions to your HSA in the current tax year, then TurboTax asks you if you want to withdraw the entire excess before the due date of the return.
If you say "Yes", then TurboTax will place the amount of the excess on line 8 of Schedule 1 (1040) as Other Income. Why? Because your excess HSA contribution - if made through payroll deduction - has already been removed from Wages in boxes 1, 3, and 5 on your W-2. So it makes sense that you shouldn't get the tax benefit for the excess contribution, but since it's already been removed from Wages, it has to get added back.
So, yes, you will pay income tax on the excess, but you would have anyway if you had not over-contributed.
Also, you must contact your HSA plan administrator and tell them that you want to withdraw an excess contribution (make sure you specify that).
If you had an amount on line 49 of the 5329, then instead of withdrawing the excess in whatever year that was, the excess was rolled over (in a manner of speaking) to the next year.
This incurs a 6% excise tax penalty for as long as the excess is in the HSA. This carry forward also should reduce the annual limit for the next year (if you don't adjust your contributions for the next year, you end up propagating the excess to another year - more 6% tax).
[Edited 3/17/2020 4:58 pm CDT - made year neutral]
