The term "taxable refund," in this context, refers to a scenario in which the state tax refund you received, say, in 2019 for what you reported on your tax year 2018 state return, is taxable on your 2019 federal tax return.
Please see the TurboTax Blog article "Is My State Tax Refund Taxable and Why?" and Help article "Do I need to report the state or local refund I got last year? Is it taxable?" for an explanation.
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