State tax filing

You have reported the state refund, but you are not seeing it on Schedule 1 because TurboTax determined that it was not taxable.   Did you itemize deductions on your 2019 tax return?  If not, it is not taxable.   I believe the CP 2057 was automatically sent out, but it is more than likely that you do NOT need to file the amendment.   Especially if you went through the 1040X and there was no change.   The notice is not going to change the amount of your refund, but it is going to cause a bit of a delay.   I have seen a few of these notices regarding the state refund - none required amending but the refunds were delayed by a few weeks.   If the notice requests a response or there is an option to respond, do so.   But if it does not and you know the state refund is not taxable, just wait a little longer.   

Whether or not your state income tax refund is taxable on your federal income tax return depends on whether you took an itemized deduction Schedule A for the tax that was later refunded.

• Don't report any of the refund as income if you didn’t itemize your deductions on your federal tax return for the tax year that generated the refund.
• If you took an itemized deduction in an earlier year for taxes paid that were later refunded, you may have to include all or part of the refund as income on your tax return. Use Worksheet 2, Recoveries of Itemized Deductions in Publication 525, Taxable and Nontaxable Income to determine the taxable amount of your state or local refunds to report on your tax return.   Based on your answers in TurboTax, the refund is not taxable and should not be included on Schedule 1.    The worksheet in the link is what TurboTax uses to figure the amount of your state tax refund that is taxable.  This link will take you directly to the worksheet, but you only need it if you itemized last year.  

TurboTax has an accuracy guarantee in the very unlikely event that a calculation error causes you to owe any interest or penalties on your tax return.