You said "IRS" but I assume you mean the Indiana state tax agency.
It is not possible to pay state taxes out of the Federal refund. There is no mechanism to do so, and there are over 40 different state tax agencies. The only thing that can be paid out of a Federal refund are the TurboTax product fees. See this FAQ:
You can look at your Indiana state tax website to see what methods they accept for tax payments, or perhaps the letter says how you can pay it. I think you can even pay electronically on their website.
The state tax can not be deducted from the federal refund. You can only have the Turbo Tax fees deducted. You will still get the full federal refund minus any fees you had deducted. Turbo Tax just shows you a screen at the end showing the Net amount of federal and state combined. But it is just for your own info. You do still have to pay the state yourself separately. See,
Check the printout or PDF of your return; look for the state cover sheet with the Turbotax logo. If you owed tax, it will show the payment information and how/when you decided to pay. Read the state payment instructions carefully since most states cannot be paid from within the TT system and requires additional steps.