No ... it is not income as long as you do not deduct the taxes on the tax return to start with ... so you could only claim the taxes paid less the reduction that will be refunded. So if you paid $4000 in 2022 but they will return $1000 in 2023 only claim the $3000 on the 2022 return. If you do claim the entire $4000 paid in 2022 then you need to reduce the taxes paid in 2023 by the amount refunded. Either option is valid ... you figure out which works best for you.
