I took the rest of an HSA I had out in 2025 to pay medical expenses. Why is Turbo Tax showing this money as income. Shouldn't it be tax free?

[MinhT1]

While entering your form 1099-SA for your HSA distribution, you should indicate that the distribution was used for medical expenses and there will be no tax on it.

[dmertz]

If you indicated that the entire amount distributed was used for qualified medical expenses, TurboTax will treat is as nontaxable income on Form 8889.  Nontaxable income does not appear in your AGI, so it has no effect on the rest of your tax return.