Get your taxes done using TurboTax

Federal taxes state refunds if you itemized in the "previous tax year". If you used TurboTax last year, the program has the data from your 2021 Tax return and automatically transfers over the state refund amount into taxable income if you itemized in 2021. 

I also noticed that you put the $160 amount in two places. The one you circled with a "?" is for miscellaneous income, 1099-A and 1099-C. State refund amounts do not go there. You can delete that and that should fix your issue. 

Take a look at the Tax Summary and line 1 of Schedule 1 to double-check whether or not the refund is being reported as taxable income. 

Also, make sure to double-check that you answered the question about itemizing in the prior year.