I itemized in 2017 and will in 2018, and received state tax refund in 2018. https://www.irs.gov/pub/irs-drop/rr-19-11.pdf Is TurboTax updated for new rules above?

[Opus 17]

Firstly, that ruling applies to the 2019 tax season, not 2018.  Second, there is nothing new in that ruling.  It only describes how the long-existing “tax benefit rule” applies in some new situations created by the $10,000 cap on state and local tax deductions.  A refund of state income tax that was previously deducted must always be analyzed to determine how much tax benefit the taxpayer got from the original deduction.  (In fact, any rebate or reimbursement of a prevously deducted item has always been subject to the same analysis.)

I’m sure TurboTax will handle this situation automatically next year if you used TurboTax this year, and for customers who didn’t use TurboTax this year, the 2019 program will have to ask them some detailed questions about their 2018 tax return, as it does now.