You would enter the 1099G in the Wages and Income section of the Federal return regardless of which state it was from.

The taxable on the Federal return is determined if itemised on the prior year Federal return.

In general, state and local income tax refunds are taxable if the refunded tax was deducted in a prior year and you received a tax benefit from the deduction. Refunds are partially taxable if your itemized deductions last year exceeded your standard deduction by less than the amount of the refund.