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Before you started entering your tax data into your TurboTax program, the program assumed you had not received your stimulus payment yet, so when you entered the amount you received, it was subtracted from your refund. So, your stimulus payment is not taxable and it is not decreasing your refund, your refund was simply overstated to begin with by the amount of your stimulus payment.
I want to know as well
The refund shown is a work in progress. If you are seeing the refund drop after you enter your stimulus payment it is because the program was calculating your refund based on not receiving your stimulus payment. Once you entered that you did receive it, your refund would drop by the amount you received since you already got it.
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