The IRS requires a value in the state field. If your country does not have a state, use a province or something similar to the state. It's not TurboTax that won't e-file the return, it is the IRS rejecting the return for e-file behind the scenes during a quick pre-screening. This type of rejection also happens if the a social security or EIN number doesn't match a legal name.
You can file federal (IRS) returns if you or your employer has a non-U.S. address. However, there are some restrictions regarding foreign-address returns:
Some states also let you e-file with non-U.S. addresses. We'll let you know if your state supports this.
Related Information: