Page 85 of the instructions for form 1040 has the worksheet for figuring whether your state/local tax refund is taxable. Cliff Notes version: you can only deduct $10K in SALT taxes and so if you would have hit that anyway even with your refund, it's not taxable. So I know that mine is not taxable, yet TurboTax is still adding it to my income on my generated 1040.
