Sounds like you are in the wrong spot. Get out of there and it goes here
Enter the 1099G under
Federal Taxes Tab or Personal for Home & Business
Wages & Income
Choose Explore on my own (if it comes up)
Then scroll down to Other Common Income
Then it's the line - STATE AND LOCAL TAX REFUNDS - Click the Start or Update button on the right.
(You do not want the next line that says Other 1099-G Income. And not the top line that says Visit All).
On the first screen check YES - Received a State Refund.
Enter the amount and continue on and after a couple screens, it will ask you a couple questions to determine if it's taxable. It may or may not be taxable. It is taxable if you itemized deductions last year. If you took the standard deduction it is not taxable.
It may or may not be taxable. It is taxable if you itemized deductions last year. If you took the standard deduction it is not taxable. If you Itemized and took the state income tax deduction instead of the sales tax deduction on sch A line 5 you got a deduction for it. So now the refund can be taxable.