The 'Free' state refers to the download of the software for 1 state for free. You can do that after you install the TTax program and start a return. At the appropriate point it will ask if you want to download the state software.
You should be aware that you can prepare as many state returns for that one state as necessary. You can print and mail the returns at no additional charge.
However, there is an ADDITIONAL charge for state return if you want to e-file.