I received the state tax refund in 2017 for 10,757. The prior year (2016) I claimed state & local income taxes paid 19,154 on Schedule A.
that's where it belonged so nonbusiness
a side note: I never understood why my refund amount is taxable in the next year.
in one year you took the deduction of $X that lower your Federal Income taxes unless you were paying alternative minimum tax form 6251. that duction was excessive because you got part refunded in the following year, under rules for cash basis taxpayers a refund of an excess deduction, one that produces a tax benefit, is taxable in the year received.
