Received a refund check from the US treasury because of the Sweet vs Cardona Settlement. Would the refund be considered taxable income by the state of New Jersey?

Legal settlements that are taxable (including previously deducted medical expenses related to physical injury or illness) are entered as miscellaneous (other) income.

Interest earned on settlements is taxable income and should be entered as a  Form 1099-INT.

If you received a 1099-MISC:

1. Sign in to TurboTax and open or continue your return.
2. Search for 1099-misc and select the Jump to link.
3. If you're asked Did you get a 1099-MISC?, answer Yes.
   • If you've already entered a 1099-MISC, select Add Another 1099-MISC.
4. Enter the information from your 1099-MISC and select Continue.
5. On the Describe the reason for this 1099-MISC screen,
   enter lawsuit settlement and select Continue.
6. On the Does one of these uncommon situations apply? screen, select This was money from a lawsuit settlement and then answer the back wages question before selecting Continue.

If you didn’t receive a 1099-MISC:

1. Sign in to TurboTax and open or continue your return.
2. Search for lawsuit settlement and select the Jump to link.
3. Answer Yes to the question Any Other Taxable Income?
   • If you've already entered miscellaneous income, select Add Another Miscellaneous Income Item.
4. Enter a brief description and the amount you received and select Continue.