What does this mean under Wages and Income regarding my State refund? Total of all your payments and withholding

State tax refunds from a prior year may be taxable on your federal tax return if you itemized deductions in that prior year.

• If you Itemized your deductions last year, you may have taken the full amount of your state withholdings as a deduction.
• If so your deduction was too large.
• The IRS wants you to recalculate your taxes based on the adjusted amount.

This is fund under 

1. Wages & Income
2. Other common income
3. Refunds Received for State/Local Tax Returns