Get your taxes done using TurboTax

After you enter a state refund from a prior year, there is a follow up screen to determine if it is taxable.

1. Select Federal on the left side.
2. Select Income & Expenses toward the upper left.
3. Find Refunds Received for State/Local Tax Returns on the list and click Edit to the right.
4. The next page will be Tell us about your refund.
5. Enter your information.
6. When you click Continue, it takes you back to the summary. Click Done.
7. The next screen, Refunds From Years Prior to 2020, gives you the opportunity to show the amount is not taxable, but it defaults to taxable. See the image below. 
8. If your refund is not taxable enter 0 in the Taxable amount box.