Randy Is a Single Individual Who Receives a Salary of $30,000

Randy is a single individual who receives a salary of $30,000. During 2014, he has $7,000 withheld for payment of his federal income taxes and $2,500 for his state income taxes. In 2014, he receives a $400 refund after filing his 2014 federal tax return and a $50 refund after filing his state tax return. I. Randy is allowed a deduction for the $2,500 of state taxes withheld from his salary on his 2014 federal tax return. II. If Randy has total itemized deductions of $6,250 on his 2013 federal tax return, he must include the $50 state tax refund in his 2014 gross income.

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