@Anita01, I received a reasonably large state tax refund in 2018 on 2017 taxes. I paid AMT for the 2017 tax year because I lost part of my SALT deduction as described above.
It is now 2019 and I am working on my 2018 taxes. I made the exact computation discussed above, refiguring my 2017 AMT. Refiguring increased my Income tax (form 1040, line 44) by ~ $1500 and decreased my AMT (form 1040, Line 45) by ~ $2000.
Despite the changes in my 2017 AMT establishing that I had lost much of the SALT deduction, Turbotax reports that the 2017 refund (paid in 2018) is taxable. There is seemingly no set of numbers that I can put into turbotax that will give any answer other than 100% taxable. Is there a bug or am I doing something wrong?