it is if you deducted that amount on 2021 Schedule A
Having got it refunded, you didn't pay it, so you couldn't deduct it.
the deduction is cancelled out by calling it income now.
A State Tax Refund is taxable if you itemized deductions on that prior year's federal return and took a deduction for state income taxes instead of the sale tax. You got a deduction benefit for it so now you have to include it as income. If you took the standard deduction it is not taxable and you don't need to report it.
If you entered in TurboTax, it will show up on the income screen, but that doesn't mean it is reported on your tax return. Only if all three of the following are true, your refund counts as taxable income:
Even when your refund is taxable, it may not be the entire amount. The amount that is taxable depends on how much the deduction affected your refund or tax bill last year. More information
@DawnC Can you please explain (and ask Turbo Tax to post a help article) that CA Middle Class Tax refund on a 1099Misc is NOT the same kind of state refund you got on your tax return on 1099G. And it is still taxable even if you took the Standard Deduction. There's one guy around here I don't know how to explain that to. Unless I'm all wrong.
This guy Ace in Space on this thread.
https://ttlc.intuit.com/community/self-employed-group/discussion/i-received-a-middle-class-tax-refund-from-the-state-of-california-is-this-considered-taxable-income/00/2819885