Confused about State and Local Taxes Prompt

[Lonestar]

I'm making my final pass through my taxes.. hopefully...
I have an entry for a tax refund from another state. After entering initial numbers, it asks about whether I took standard or itemized last year, I itemized. It then brings up a summary of some numbers from last year's 1040. (From where it got them, I don't know because I didn't use TT last year.) And, it asks if the numbers are correct. No, they are not. I select No and it wants to see if the other state's refund is taxable. It then asks if box 5a is checked, Yes, and wants me to enter what I paid for State and Local Taxes in 2023. 
So... now the confusion... line 5a is only the state and local sales taxes I paid in my home state. Line 5b is real estate taxes I paid in my home state and 5d a total of those. Then line 5e is $10,000 (apparently the max the IRS allows). 
I am confused as to what TT is asking for at this point. Does it want only what is on 5a? Or the total on 5d? Or something else? I have entered both numbers and proceeded and it just tells me that I don't have to pay taxes on the refund.
I can go with it either way and may this is just so it can do a calculation... but also, on the question about last year's 1040 numbers, the AGI is WAY OFF, showing a negative value and doesn't offer for me to correct it! Does TT not care what that number is, but only the state a local taxes paid? 

Thanks in advance!

Well, I went a bit further, and it's giving me the following message. I have NO idea what this means... paying part of your 2023 taxes in 2023'. As far as I know, I paid ALL my 2023 taxes in 2023. And reducing my itemized deductions by $6730?!? Arrgh! LOL What is going on?

One more thing... I can't help it... When it asks me if I took standard or itemized last year, in RED it says "(Recommended)" next to Standard. Why would it say that? Why not just let someone answer whatever the truth is? 😕 It could be misleading...

[KrisD15]

If you itemized deductions on your 2023 tax year federal return, you deducted state taxes paid. 

Then, you got a refund of state tax. 

Is the state refund taxable?

Think of it this way, what if you paid exactly the correct amount of state tax in 2023 and that was the number you used when you itemized, would it have made a difference on your federal return compared to what you really did file?

Example-

You claimed 10,000 state tax on your 2023 federal return and later got a 1,000 state refund. 

If you had claimed 9,000 on your 2023 federal return, would that have changed your 2023 federal tax liability?

maybe.

Your "Taxable Income" on line 15 would have been 1,000 more so your tax would have been computed on 1,000 more income

But if your tax zeroed out, your tax may have still zeroed out

or maybe a non-refundable credit that was limited which would now be allowed in full.

And what if the tax claimed was subject to the SALT limit?

If you had 12,000 in taxes paid but could only claim 10,000 any refund 2,000 or less isn't reported as income.

The program is trying to figure this out for you.

If you did not use TurboTax to file your 2023 federal return, it would have no way of knowing the numbers from your 2023 return, you would need to enter everything in. 

The determination of whether state tax refunded is now federal income is made with no regard to which state issued the refund. You can add the state refunds together to see if anything needs to be claimed on the federal return. 

If you have access to your 2023 return, just change the schedule A deduction (subtract the refunded amount)  and if it increases the tax due, that's the amount you need to claim as income.