William, a single taxpayer, has $3,500 state income tax withheld from his paychecks in 2016 . When he filed his 2016 state income tax return on April 15, 2017, he calculated and received a $600 refund. The $600 refund was received on May 27, 2017 . What are the federal tax effects of the state income tax events of 2016 and 2017?
I. If his itemized deductions including state income taxes total

$6,600 in 2016, William includes $300 in gross income for 2017,
II. If he did not itemize his deductions in 2016, none of the refund is included in 2017 gross income.
a. Only statement I is correct.
b. Only statement II is correct.
c. Both statements are correct.
d. Neither statement is correct.

c