Q. If I put this on Schedule 1, can I still take the standard deduction?
A. Yes
But the bigger question is do you even need to report the $1735 as income. The answer is no, unless you itemized deductions in the previous year and the amount of your medical expenses was in excess of 7.5% of your AGI. If the amount of your medical expenses, in excess of 7.5% of your AGI, was less than $1735, your report only the lesser amount as income. That is, you only report the refund as income if you got some tax benefit from claiming the deduction the previous year.
