Box 4 would report a refund of interest paid in a prior year.
That amount is not needed nor reported on your tax return.
It is not deductible because you didn't pay it this tax year, it was refunded and not included as interest paid in Box 1.
IF THE REFUND was for a year when you did deduct the interest, you may need to recover the itemized deduction for that prior year.
How that works is basically like this-
you would figure that prior year return as if you had not deducted that interest,
so if that year you claimed 2,000 interest but was refunded 100, you would "refigure" (NOT AMEND) the prior return claiming 1,900 interest.
If your refund drops by $5.00, you would need to claim 5 dollars as "other income" on this years return.
More information IRS Pub 525 page 24
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