Lynnette Is a Single Individual Who Receives a Salary of $36,000

Lynnette is a single individual who receives a salary of $36,000. During 2014, she has $6,800 withheld for payment of her federal income taxes and $2,900 for her 2014 state income taxes. In 2015, she receives a $450 refund after filing her 2014 federal tax return and a $750 refund after filing her 2014 state tax return. I If Lynnette has total itemized deductions of $6,000 on her 2014 federal tax return, she must include the entire $750 refund in her 2015 gross income. II. If Lynnette uses the standard deduction in filing her 2014 federal income tax return, the $750 refund is not taxable in 2015.

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