William,a Single Taxpayer,has $3,500 State Income Tax Withheld from His

Multiple Choice

William,a single taxpayer,has $3,500 state income tax withheld from his paychecks in 2012.When he filed his 2012 state income tax return on April 15,2013,he calculated and received a $600 refund.The $600 refund was received on May 27,2013.What are the federal tax effects of the state income tax events of 2012 and 2013?
I.If his itemized deductions total $6,000 in 2012,William includes $300 in gross income for 2013
II.If he did not itemize his deductions in 2012,none of the refund is included in 2013 gross income.

A) Only statement I is correct.
B) Only statement II is correct.
C) Both statements are correct.
D) Neither statement is correct.