TT keeps generating the state and local tax refund worksheet which is set up to process if it was an 2022 refund and not a different year. As such, TT is generating that the refund is taxable yet there was not tax benefit received as a result of the refund. Even with the refund state and local incomes taxes and property taxes are higher than the SALT deduction. IRS publication 525 states not to use that .
Click on the following link to download the PDF of IRS Publication 525. Worksheet 2. Recoveries of Itemized Deductions is on page 28.
But judging from what you said, you might be able to take a shortcut. Look at Schedule A in your 2020 tax return. If the box on line 5a is checked, none of the 2020 state or local income tax refund is taxable. If the box on line 5a is not checked, subtract line 5e from line 5d. If the result is equal to or more than your 2020 refund, the refund is not taxable. If none of the refund is taxable, you can enter zero as the taxable amount in TurboTax, or don't even enter the refund in TurboTax at all.