You prepared the state tax returns correctly for your son who lives in IL and worked remotely for a company in CA. All of his income should be allocated to IL which is why he is getting a refund from CA and a credit for the taxes paid to CA on his IL state tax return.
Please review the TurboTax articles How do I file a nonresident state return? and Multiple States - Figuring What's Owed When You Live and Work in More Than One State for additional information.
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