State tax filing

If you claimed the standard deduction on your federal return, the state refund is not taxable.  To fix this, you will want to make sure you are not claiming the refund amount on your state return.  It should be listed as $0 or left blank.  To verify this section in TurboTax, you can follow these steps:

1. Click State Taxes on the left-hand panel
2. Click Edit next to Virginia
3. Click Income
4. Click Done with Income
5. Click Continue on the "How Virginia Handles Income or Part-Year Residents" screen
6. On the Part-Year Allocation screen, verify the State Income Tax Refunds do not exceed Federal Total.  If you took the Standard Deduction, this amount should be $0

See the screenshot below of where to correct Part-Year Allocations:

@sachin9

[Edited 02/09/23 | 8:02 am PST]