A Cash Out refinance is not reported as taxable income on either of your tax returns.
No loan proceeds are not income.
something else to be aware of. interest on the portion of the refi over and above the previous mortgage will not be deductible since it appears it was used for personal purposes.
Borrowed money is not your money. Never was, is not now and never will be. (Unless you default on the loan.) Therefore nothing concerning that money is reported on your tax return.