Foreign Tax refunds are not includible on your tax return, says Tax Expert @ThomasM125.
See Is foreign tax refund taxable in the US?
Your tax may be higher because although the foreign earned income exclusion excludes your income, that income is still used to figure the tax rate on your other income. Additionally, the exclusion may reduce some tax credits.
If you are paying more tax by using exclusion, you may want to tell TurboTax that you do not want to exclude your foreign income.
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