In the Stories Behind the Red Songs Taylor says, "State of Grace is a song I wrote at the beginning process of making this album, and I think it helps to define what the rest of the record is about, just with one line. There's a line in the song that says 'Love is a ruthless game/Unless you play it good and right'. That's kind of like a warning, for the rest of the record. This is what's going to happen if you don't play this right. This is what could happen if you do. It almost serves as the perfect kind of warning label for the rest of the record. As soon as you hear that song, there are two ways this could go, you could be good to people, or you could not play fair, and both the outcomes are reflected on the record."
Who is this song about?
Taylor says in her Good Morning America preview for the song October 15th, "I wrote this song about when you first fall in love with someone the possibilities, kind of thinking about the different ways that it could go. It's a really big sound. To me, this sounds like the feeling of falling in love in an epic way." There are several clues, but one especially telling comes in the line, "Just twin fire signs, four blue eyes". Taylor has blue eyes. Who has blue eyes that Taylor has dated? Jake Gyllenhaal has blue eyes! They also have the same astrological sign, Sagittarius, a fire sign. His birthday is December 19, 1980 and Taylor's birthday is December 13, 1989.
She includes how they met. Taylor wasn't expecting to fall in love. In the first part of the song she talks about how life is so busy, "And all we know is touch and go." Life is just coming and going. And then she meets him, "And I never saw you coming/And I’ll never be the same." She feel hard, "But this love is brave and wild."
It didn't last though. She "loved in shades of wrong". In the liner notes it references their break up, I LOVE YOU DOESN'T COUNT AFTER GOODBYE. In We Are Never Ever Getting Back Together she says "We break up, you call me... i love you." This I love you doesn't count. And she could also be referencing the fact that she doesn't love him anymore. Too bad, it sounds like it was great while it lasted.