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No. Box 18 just means you didn't say you are taking the Itemized Deductions instead of Standard Deduction. You could still have taken the Itemized Deductions or Standard Deduction. Do you have Schedule A? Then you probably itemized deductions.
How much is on your 2020 1040 line 12?
A State Tax Refund is taxable if you itemized deductions on that prior year's federal return and took a deduction for state income taxes instead of the sale tax. You got a deduction benefit for it so now you have to include it as income. If you took the standard deduction it is not taxable and you don't need to report it.
Thank you for your help!
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