Where is your 2022 state refund on your 2023 tax return? Is it on Schedule 1 line 1? (Look at the actual tax forms, not a summary screen in TurboTax.) If that's where it is, it's there because you itemized deductions on your 2022 tax return, and your deduction for state income tax reduced your 2022 federal tax. But in 2023 you got back part of the 2022 state tax that you deducted, so you have to report it as income on your 2023 federal return.
If you see the state tax on the 2023 Income Summary in TurboTax, but it's not on Schedule 1 line 1, that just means that it was entered in TurboTax, but it is not actually on your 2023 tax return. That would happen if you did not itemized deductions on your 2022 tax return. TurboTax knows you got the state refund, but it also knows that the refund is not taxable.
