Derek, a cash basis, unmarried taxpayer, had $2,620 of state income tax withheld during 2023. Also in 2023, Derek paid $262 that was due when he filed his 2022 state income tax return and made estimated payments of $5,240 toward his 2023 state income tax liability. When Derek files his 2023 Federal income tax return in April 2024, he elects to take the standard deduction, which reduced his taxable income. As a result of overpaying his 2023 state income tax, Derek receives a refund of $1,834 early in 2024.
How much of the $1,834 will Derek include in his 2024 gross income?