Your state or local tax refund received in 2020 counts as income if you itemized your deductions in 2019.
Your 2016 state tax refund would apply to your 2017 tax return. You will not report it on 2020 taxes.
The IRS is basically preventing double-dipping. You can't claim a deduction for your state income taxes, then later receive a tax-free refund of that same money as well. You must effectively adjust the amount of your refund to account for the deduction you previously claimed.
