The State Tax Refund worksheet is used to determine how much (if any) of your previous year(s) State Tax Refund is included in taxable income for the current tax year. If you did not itemize your deductions on Schedule A during the year the State Refund pertains to, none of the refund will be included in your taxable income.
See the TurboTax FAQ below for more details: https://ttlc.intuit.com/replies/3300438