Are you sure it is marking it as taxable? Just because you see it on the income summary page in TurboTax does not mean it is being treated as taxable. As long as you told TurboTax that you took the standard deduction last year, the amount will not be transferred to your tax return. Preview your Form 1040 to verify. The income summary page will show all of your entries whether taxable or not, but only taxable income gets transferred to your Form 1040.