There is no state income tax on most income in the State of Tennessee, including unemployment compensation. You should leave blank Box 10a-11 empty when you input your 1099-G.
For the 2020 tax year, the Tennessee levied a 1% flat-rate tax on all income earned from interest and dividends. However, this will be repealed for the 2021 tax year.
Here's the problem - this box is required to finish. Yes, there's no state tax, but it still requires the user to input what state it IS. And Tennessee is the ONLY state not in the drop down list.
In this case, all three boxes - 10a, 10b, and 11 - should be blank. Are they?
If they are all blank (or empty - sometimes this is different), then you should not get this error message.
Try clicking the trash can icon on the far right to clear the three boxes.
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