Problem

Pierre, a cash basis, unmarried taxpayer, had $1,400 of state income tax withheld during 2016. Also in 2016, Pierre paid $455 that was due when he filed his 2015 state income tax return and made estimated payments of $975 towards his 2016 state income tax liability. When Pierre files his 2016 Federal income tax return in April 2017, he elects to itemize deductions, which amount to $10,650, including the state income tax payments and withholdings, all of which reduce his taxable income. As a result of overpaying his 2016 state income tax, Pierre receives a refund of $630 in 2017. The standard deduction for single taxpayers for 2015 was $6,300.

a. What is Pierre's 2016 state income tax deduction?

b. How much of the $630 will Pierre include in his 2017 gross income?