I noticed this same issue this morning. Yes, it's a major problem for affected taxpayers that TurboTax needs to address.
For me, the credit (as inappropriately limited by TurboTax) appears on line 43 of my Form 540. It seems to me that a simple workaround would be to override the line 43 amount generated by TurboTax and replace it with the proper credit amount.
Of course, it would be better not to have to override anything, but this is a potential solution if TurboTax hasn't fixed the problem by the time of filing.
