I have read the instructions several times. It states on page 11: "Deduction recoveries. A recovery or refund of a previously deducted item increases net investment income in the year of the recovery."
It does not state whether it is the recovery of the state income tax refund or the federal income tax refund. I would think it is the Federal Refund (I received the 2020 federal refund in 2022, not in 2021 as I should have) since I am doing my federal tax return, but line 7 is actually for the recovery of state income tax, which makes the answer completely unclear since the tax instructions do not spell it out.
