I received a Form 1099-G, for my state tax refund. Do I have to include this amount as income on my return?

If you itemized deductions on your federal tax return for 2008 or a prior year, and received a refund of state or local taxes in 2009, you may have to include all or part of the refund as income on your 2009 tax return.

If you did not itemize your deductions on your federal tax return for the same year as the refund, do not report any of the refund as income.