"State income tax refunds included in federal taxable income.

Income tax refunds received from Montana or another state are not taxable. If you are required to include your state income tax refund on Form 1040, Schedule 1, line 1, report that amount on this line. Also report any state income tax refund included in your federal business income on this line, such as refunds of pass-through entity tax included in pass-through entity income."

From the form instructions.