Yes, it is taxable income. Form 40 line 10 lists the subtractions from form 39R. You do not want to enter your lottery income on Form 39R. To make it taxable, remove the entry.
You are also correct about the instructions but that is a state issue not a TurboTax issue. TurboTax is correctly following the state instructions.
Instructions - Individual Income Tax 2024 state:
Line 19 Other Income From federal Schedule 1, line 8, enter any other income received while an Idaho resident or part-year resident or from an Idaho source. An example is: • Idaho lottery winnings over $600
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