This is late for 2021 tax filing but I want to make sure that next year if anyone comes across this problem, they know the solution.
So we had this same issue. I spent hours figuring out the issue with Turbotax support. Finally, I was lucky to get a right Expert who understood the problem and helped me resolve it right before the tax day ..Thank god!
We also had foreign status in 2021 but in turbotax personal info, we had selected California as the state of resident so Turbotax had chosen form 540(filed for CA resident) for us. Thus it required the state and the county of the residency.
Once we chose "foreign country" as the state of resident in personal info section, Turbotax generated for 540NR - form for non residents. This fixed my issues as TT did not ask for state in USA and county for that address.
Hope this helps.
This has been a big headache for us so if anyone needs further help I can provide more details.
