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This has been resolved by John at [phone number removed].  He explained that the $40 extra is only if you select payment of your $25 state tax filing charge from your tax refund.  (And why would anyone pay $65 for a $25 service?  Huh?)   My taxes have now been filed electronically for an additional $25, not $65.

 

Before the window popped up saying I was going to be paying $25 for filing the state (not the problem) and $40 in addition because I had a federal refund coming (that was the problem),  I had instructed TT to pay all refunds by direct deposit, as I have always done.  Why would the possibility of paying $40 for the refund even arise if it was already documented that I was receving my refund via direct deposit and had only refunds coming from state and federal?

 

John, the TT employee who I spoke to on the phone, said he'd send it up the line that the wording was extremely misleading and try to get the problem fixed.  Hope he does.  Based  on similar posts years ago, looks like this is not a new TT problem.