I am nonresident alien student in US from India and filing 2016 federal tax using 1040-NREZ. I used itemized deductions in 2015 federal taxes (standard deductions). I received state tax refund last year. Line 4 of 1040-NREZ is :
Taxable refunds, credits, or offsets of state and local income taxes.
When I checked instructions for 1040-NREZ, it says
If you were a student or business apprentice from India in 2015 and you claimed the standard deduction on your 2015 tax return, none of your refund is taxable.
Is "none of your refund" referring to both state and federal tax returns?
Instructions for 1040-NREZ:
If you received a refund, credit, or offset of state or local income taxes in 2016, you may receive a Form 1099-G. If you chose to apply part or all of the refund to your 2016 estimated state or local income tax, the amount applied is treated as received in 2016.
So clearly federal tax refund is not taxable for me. But what about state tax return? I did not receive form 1099-G. I tried searching pub 525 itemized deduction recoveries, but it is confusing to me.
I found these questions:
Are tax federal or state tax refunds taxable in the next tax year? It says state tax return is taxable. It is so for residents or for nonresidents as well?
Is Maryland's Wynne Tax Refund taxable on my federal return? I couldn't figure out everything. I am guessing the question was aimed at US residents.
Can someone comment here?