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The $40 is the Refund Processing Service charge if you want to have any Turbo Tax fees deducted from your federal refund.   The free state you got is only a free state PROGRAM download.  Then each state return including the first one is $25 to efile or you can print and mail state for free.   Go back through the File tab SLOWLY and read the screens.  People get going too fast and clicking on the right corner box to continue.  But you have to click on the left box to pay with a credit card to avoid the fee.    

The 2025–2026 NYS Inflation Refund checks are generally not taxable for New York State personal income tax purposes, as they are considered a return of previously paid sales tax. However, for federal income tax purposes, the refund may be considered taxable income if you itemized deductions on your federal return and received a tax benefit from that deduction in a previous year. 

The Form 5695 for Home Energy Credits is available when using the TurboTax online editions.  If you are currently signed onto the online account, sign off and then sign on again.   The Form 5695 has not yet been finalized for the TurboTax desktop editions.  It may be available sometime next week.

I have exactly the same problem.  This is the first time I've ever taken money out of my ROTH IRA to spend, BUT my accounts were created more than 5 years ago and I'm > 59.5 in age, meaning this was a qualified distribution - tax free.  Why am I being asked a question about the total contributions made to all of my ROTH IRAs for all time?  This number will take a lot of work to determine, IF it can be determined at all.  DITTO for the link to get help.  It wasn't helpful at all, referring mostly to trad IRAs, not ROTH distributions.

I got the exact same messages when I tried to e-file today.  TT is junk software apparently and can't figure out simple stuff. Forms 5329 and 8606 just became available today... but maybe they are only available to finish the return and not ready to transmit? Guess I'll wait and try again on Sunday. If I keep getting the same stupid answer I'll just print and mail and write-off TT for any future use. It really has gone downhill.   I'll add that I only paid for Federal, so why is TT asking about a Washington State return that doesn't need to be filed? I had this issue last year as the Desktop version would not let me file until the state form (which is only used to file for some kind of credit) was available. Probably the same $#!+ is happening this year. Get a clue TT, I do NOT need to file a state return!

Do not choose to pay the $25 state e-file fee by using refund processing.   When you use desktop download software you get the software to prepare the state return, but there is an extra fee of $25 to e-file the state.   And then......if you choose to pay the $25 by having it deducted from your federal refund, you pay an extra $40 refund processing fee to a third party bank.   Do not do it.   Either pay the $25 upfront with a credit or debit card, or avoid the state e-file fee altogether by printing and mailing the state return.   What is Refund Processing Service?  

Go back through the File section and remove the option to have your TurboTax fees deducted from your federal tax refund.  Apparently you chose this option and need it removed.  There is a $40 service charge for the option.