I suggest you look on your federal form 1040 to verify that the state tax refund is not showing as taxable. You can view your form 1040 and schedules 1 to 3 while working in TurboTax as follows:
1. Find the "Tax Tools" option on your left menu bar and click on it
2. Click on "Tools"
3. Click on "View Tax Summary"
4. On the left menu bar see the option "Preview my 1040" and click on it to view form 1040 and schedule 1 to 3
The state refund would show up on schedule 1, line 1 if it is included in your federal income.
If the refund does not show on your federal tax return, it sounds like it is listed incorrectly on your state tax return. If so, I suggest you contact TurboTax so they can have a look at your return in order to provide an explanation and resolution to your problem as follows:
https://ttlc.intuit.com/community/using-turbotax/help/what-is-the-turbotax-phone-number/00/25632
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