Whether the income is taxable or not depends upon what it represents.
Since you received cash and the state is simply passing that cash out to you then that cash would be tax free as an inheritance.
You need not claim it unless you have some reason to believe that it represents taxable income. If is merely a return of property you previously had and forgot about, that is not a taxable event. For example, if it was an old bank account that you forgot about, the portion that is interest is taxable but not the portion that represents what you put into the account
How to Find Your Unclaimed Property & Cash
