Yes, you can prepare one state at no additional charge in TurboTax Desktop in all versions except Basic. If you are using Basic, the state download is extra.
State e-file is an additional charge in all versions.
I'm not sure why you can't continue. Once you finish your returns, you are asked about how your want to file your returns in the file section. The federal option comes first, then the state. You can e-file your federal and select Print and mail for your state.
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