State refunds are not taxable if you took the standard deduction in the previous year. In the state refund section, the On-Demand guidance screen is referencing the 2022 numbers instead of the 2021 numbers. The 2021 numbers are below. This will be corrected in a future update; thank you. @kzc
The standard deduction for married couples filing jointly for tax year 2021 rises to $25,100, up $300 from the prior year (2020). For single taxpayers and married individuals filing separately, the standard deduction rises to $12,550 for 2021, up $150, and for heads of households, the standard deduction will be $18,800 for the tax year 2021, up $150.
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