I have another option for you.
You'll have to amend 2017, taking your tax refund out. If it was taxable in 2017, you'll get a refund for your 2017 taxes. Then report both in 2018, the year that you received both.
Before you do that, though, make sure that you itemized in both 2016 and 2017. If you did, you'll need to amend. If you didn't, that means that you didn't get the benefit of deducting your state taxes paid on your Schedule A. If that' the case, then you don't need to claim the refunds on your return at all.
How
to Amend 2017
