This year Courtney received a $485 refund of state income taxes that she deducted on her tax return last year. Courtney included a total of $5,250 of state income taxes when she itemized deductions last year. What amount of the refund, if any, should Courtney include in gross income this year?

Multiple Choice $485 is included because Mary itemized her deductions last year.

$485 is included if itemized deductions exceeded the standard deduction by $485.

$485 is included because itemized deductions exceeded the standard deduction.

$485 is included even if Mary claimed the standard deduction.

None of the choices are correct - refunds of state income taxes are not included in gross income.