If my previous years tax returns were applied to past tax debt, does it count as income on this years taxed or not. complete refund went to local and federal gov

If you got a state refund that went to debts yes it still counts as income on the federal return.  You still got it, doesn't matter what it went to.  If was still for your benefit.

Federal income taxes owed and paid for prior tax years are not not reported on a federal tax return.

State or local taxes owed and paid for prior tax years are deductible on a federal tax return if you itemize deductions.  Only the taxes paid not any penalties and interest.