Answer:
The correct answer is letter "A": True.
Explanation:
According to the Internal Revenue Service (IRS), some state income tax refunds can be taxable income in some cases. They must be reported in the Form 1040 only in the case the taxpayer claimed a state and local taxes deduction the previous year if they were itemized. Usually, when standard deductions are claimed, state and local income tax deductions are not itemized.
