I wouldn't think it would matter since part of the recycling process probably involves washing the paper to remove the ink. Might be a good idea to call you local recycling center and ask them. I've looked mine on the internet, quite easy to find actually.

While there are differences depending on the specific type of paper being recycled (corrugated fiberboard, newspaper, mixed office waste), recycling processes include the following steps:

1. Pulping: Adding water and applying mechanical action to separate fibers from each other.
2. Screening: Using screens, with either slots or holes, to remove contaminants that are larger than pulp fibers.
3. Centrifugal cleaning: Spinning the pulp slurry in a cleaner causes materials that are more dense than pulp fibers to move outward and be rejected.
4. Flotation: Passing air bubbles through the pulp slurry, with a surfactant present, causes ink particles to collect with the foam on the surface. By removing contaminated foam, pulp is made brighter. This step is sometimes called deinking.
5. Kneading or dispersion: Mechanical action is applied to fragment contaminant particles.
6. Washing: Small particles are removed by passing water through the pulp.
7. Bleaching: If white paper is desired, bleaching uses peroxides or hydrosulfites to remove colour from the pulp.
8. Papermaking: The clean (and/or bleached) fiber is made into a "new" paper product in the same way that virgin paper is made.
9. Dissolved air flotation: Process water is cleaned for reuse.
10. Waste disposal: The unusable material left over, mainly ink, plastics, filler and short fibers, is called sludge. The sludge is buried in a landfill, burned to create energy at the paper mill or used as a fertilizer by local farmers.

 Standards

Every time paper is recycled, the fibers become shorter and weaker, so virgin pulp must be mixed with the used paper to provide strength. Because of the weakening, paper can only be recycled 4-6 times.[1]

There is no universal standard for the maximum percentage of virgin pulp in recycled paper.[2][3] 'Recycled' paper is available that includes anywhere from 10 to 100 percent "post-consumer" paper.[4] The EPA mandated the use of 50% post-consumer recycled paper by the federal government, state governments that receive federal funding, and many companies that receive money from the federal government.[5] The EPA does not regulate recycled paper used outside of the government; it only sets a minimum guideline.[2] The UK also does not have any legal standards, only non-mandatory guidelines instituted by a variety of different organizations.[2]

There are three categories of paper that can be used as feedstocks for making recycled paper: mill broke, pre-consumer waste, and post-consumer waste.[2] Mill broke includes paper trimmings from a virgin paper mill. Pre-consumer waste is material that was discarded before it was ready for consumer use. Post-consumer waste is material that was discarded after actually being used by a consumer.

That is a lot of info to digest.  So, do can you recycle paper that is wet?

Yes just let it dry out. They going to use water to break it down.

Thanks Cowboydavey for all that incredibly interesting information about paper recycling. It seems that is is quite an energy-intensive process! Is it a process that also pollutes (water and air). I have also been told that much of the paper that we recycle here in Los Angeles, gets shipped to a large recycling plant (owned by a Chinese Woman), in China, where the regulations regarding pollution are less strict. Do you know anything about this? Finally, what is the best way to recycle huge cardboard boxes? I imagine it would be to stamp on them in order to compact as much as possible and then put in recycling bin.One more querey - has anyone used the "Ecopod"  - a small recycling station, which flattens cans - I wonder if it helps the recycling plants for us to compress things at home first??