Both my wife and I received CA State unemployment which included a non-taxable Federal supplement ($600/wk). How does this get "backed out" of our taxable income??

[DanielV01]

For the Federal return TurboTax will automatically subtract up to 10,200 for each of you if you both received unemployment.  You only need to enter the 1099-G forms as you received them.

California has never taxed this income, so it won't be included on the California return.