Jacob, who is from England, had $348 of state income tax withheld in 2023. His total income was $5,800 in 2023. The deduction of the state income taxes helped reduce his taxable income, as illustrated below.

Wages	$5,800
State income tax	$348
Taxable income	$5,452

Jacob received a $22 state income tax refund in 2024 on his 2023 state return. He should report it as income on his 2024 tax return.