my tax refund was accepted
Because the Wynne tax refunds cover several years the question of it being taxable income would depend on if you were itemizing during each of those years.
Imagine this scenario:
You received a total of $942.00 back from the State of Maryland because of Wynne in 2016.
Because you itemized in year 1 and year 3 those might be counted as income. The tax software should ask you if you itemized in each of those years. If you did, and the additional deductions exceed the standard deduction by enough, the returned money for that year is taxable income in 2016.
Added info to discuss itemizing vs standard deduction.
In year 1 a taxpayer itemizes. Their total deductions are $7,000 and the standard deduction is $6,000, so they pick the better deal and claim $7,000 in deductions. If they are in the 25% tax bracket that extra $1,000 in deductions saves them $250 in federal taxes. The state tax return they file shows they over paid the state by $100, and they get a refund from the state.
In year 2 they need to address the $100 from the state, and they get a 1099-G from the state. The federal tax form asks them to determine if the money is taxable. It is because if they could have gone back in time to the year before, the $100 refund would have brought the itemized deductions down to $6,900 and the tax savings from their deductions would have only been $225. So on the year 2 tax form they have to claim $100 as income.
Now imagine a different taxpayer in a slightly different situation.
so in year 2 they look back and see if they had used the time machine:
so in year 2 the refund from year 1 isn't counted as income because in the IRS viewpoint the tax form wouldn't have changed.