Under the tax benefit rule, the state refund is only deductible up to the point where you get a tax benefit from deducting it.
Let me try and parse this out from your numbers.
If your federal tax is $121 higher when claiming the standard deduction, then your state tax deduction (the amount that state taxes raises your itemized deduction OVER the standard deduction is either $1008 (12% bracket) or $550 (22% bracket). That means that, at most, $1008 or $550 of the state refund would be taxable, not the entire $1100. As a result, if you itemize this year and save $121, you will end up paying back that same $121 next year. Do you want to hold that $121 for a year or let the IRS hold it?
That's the simple case, and assumes that tax brackets won't change and that your income next year will be similar. If your income is much higher next year (2019), then you could end up paying 22% when you only saved 12% this year, and come out slightly on the losing side. Or if your income is much lower, you could end up pay 12% when you saved 22% this year, and come out slightly ahead.
Ultimately its up to you.
