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You may have a form 1099-G stuck in your program from a previous year or from an incorrect entry in the current year. I suggest you try to delete the form 1099-G as follows:
Find form 1099-G in the list and delete the form.
I'm having this same problem. It's causing the TurboTax to not allow me to use the free file option and is forcing me to upgrade. This is ridiculous.
As a follow-up to Thomas's answer from last year, let's try this to delete the 1099-G information.
*** Desktop***
1. go to View (at the top), choose Forms, and select the desired form (1099-G). Note the Delete Form button at the bottom of the screen.
*** Online ***
1. go to Tax Tools (on the left), and navigate to Tools->Delete a form
2. delete form(s) 1099-G(s)
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