Whether your state refund is taxable depends on your tax situation. Generally, if you didn’t deduct state and local income taxes last year as an itemized deduction, your state and/or local refund is not taxable. If you deducted your state and local income taxes last year and received a state tax refund last year then your total state tax refund that you received from the previous year may be taxable. If you received a Form 1099-G from your state or local government, TurboTax will walk you through determining the taxability of the refund.
See the TurboTax blog link below for more information: