I have a similar issue. I received a refund for 2021 in 2023 and received a 1099. I itemized in 2021 but I did not get the benefit of all of the state income taxes that I paid in 2021 because of the SALT limitation of $10,000 for deducting state income taxes. There is a place at the bottom of the State and Local Income Tax Refund Worksheet for state refunds from 2021 or prior years. If I enter the refund for 2021 received in 2023 Turbotax wants to tax it. There should be a place where one can calculate how much of a refund for 2021 or earlier is taxable; but, there is not.
