I've seen that phrase when entering a 1099-G for a state refund. Part of that section determines whether your state tax refund is taxable or not, but you can also choose to skip the review of your previous year return and elect to make the refund all taxable.
If you do, then that flows to Schedule 1 and line 8 on the 1040.
Do you have a line number on Schedule 2 or 1040 that you are seeing that phrase? Or somewhere else in the program?
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