They are short term capital gains, not long term, and my federal tax bracket is 28% so they're definitely being taxed. You are right though, there was nothing wrong with the TurboTax application. I forgot that I have a capitol loss carryover, so when I adjusted the cost basis to include the compensation income that was reported on my W-2 that difference was just added to the carryover, which explains why the federal and state refunds show $0. Now off to file this amended return, thanks for your help!
