Unclaimed funds are taxable if they would have been taxable if they had been paid normally. Because you owe tax when withdrawing from a traditional IRA, you owe tax if you are the beneficiary of an IRA payment, even if it went through the unclaimed property office. (Likewise, you would not owe tax if it was a Roth IRA because Roth IRA withdrawals aren't taxable.)
Because the state probably won't issue tax documents, you would be on the honor system to report this. You can report it as miscellanous or "other" income.