Theres a state refund worksheet to determine if the refund is taxable or not. 

ProSeries does a pretty good job picking this up automatically if you prepared the prior year return, if you didnt, then theres a worksheet you can plug the prior year 1040 and Sch A figures into and it will compute any taxable state refund for you.   I find it easiest to locate that worksheet from the Where do I Enter button, once youre in the worksheet, scroll down just a little way and you'll find the 2021 1040 smart worksheet that asks about the 2021 1040 line items to compute any taxable state refund amount.