Most people who have entered all of their taxable state refund information on the previous screens should answer
No here and we'll report the amount shown on your return.
You can answer
Yes if you need to make adjustments to the amount shown. You would only need to make adjustments if you didn't already enter ALL of your taxable state refund information on the previous screens or if you need to adjust the amount for a different reason.
For more information about calculating taxable state refunds, see
Publication 525 .