When you start your Minnesota state tax return, complete all of the interview questions. You will see a screen, "Tell Us About Other Income Adjustments" and a series of items and boxes. Check any that apply, and answer the related questions. In this case, check the box "Received a one-time tax rebate for tax year 2021 from the State of Minnesota". TurboTax will provide a follow-up screen where you can enter the amount of your rebate to be excluded from Minnesota income.
The rebates were part of a package of tax cuts approved in the 2023 legislative session to return a portion of a projected $17.6 billion budget surplus to taxpayers. Individuals were eligible for $260 if they had a gross adjusted income of up to $75,000 in 2021, and $520 for married filers who earned up to $150,000. See here for more information about the rebate from the State of Minnesota Department of Revenue.