You can read about how the IRS handles this new situation at this webpage.
In the Income list in TurboTax for Federal, look for Refunds Received for State/Local Tax Returns. This may be under Other Common Income. Click Start.
Enter the information about the refund. Note that the TurboTax screens have been updated to ask you specifically what your deductions were in 2018 and how they were limited (if you did your 2018 return in TurboTax, it will use the 2018 actual numbers and ask you if they are right).
Armed with this information of what happened on your 2018 return, TurboTax can apply the new rules for the taxation of state tax refunds.
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