If you got a state tax refund in 2007, Turbo Tax automatically puts some of it into taxable income (1040 line 10). However if you were in AMT, some and probably all of that amount is not taxable.
Does anyone know if Turbo Tax warns the user or asks about this in the interview? If not, the user wouldn't normally know to go to the State Tax Refund worksheet and try to fix this problem,