California Middle class Tax Refund

[mia0579]

Did select it was for the Middle class tax refund, like see in this string of post but still says I need to fix my refund.

[t3523wd]

There seems to be too much conflicting information at this time.  I am going to wait awhile.  Millions of other Californians are faced with the confusing mess created by an ill conceived program.  While I thankful for getting my share of the wealth redistribution, the program was not well thought out and leaves many issues for clarification.  

[CarissaM]

This will be fixed on Jan 30, 2023. Please update the software if using desktop and refile the return. 

[mia0579]

Is this update for the online version? 

[CarissaM]

No. The online version automatically updated today. @mia0579 

[luckywuk123]

Sorry I'm so lame but.... New to Turbotax and I'm really confused about CA. Middle Class Tax Refund. Do I claim or not?

Thanks

[DMarkM1]

Yes you will report the Middle Class Tax Refund (MCTR) on your tax return, but it will not be taxable income.  The reason it is reported is the form 1099-Misc you received also went to the IRS.  When you file your return the IRS will be looking to reconcile that income even if non-taxable.

To enter this form 1099-Misc so that is will not be counted as taxable income: 

1. Go back to the "Wages and Income" section.
2. Locate the "Other Common Income" dropdown
3. "Show More"
4. "Start/Revisit" the 1099-Misc
5. "Yes"
6. Enter the form information
7. For the reason put CA MCTR
8. On the next page be sure to click the button for "This was a California Middle Class Tax Refund (MCTR). 
9. Finish the interview section.

Now it will not be taxable income on your federal forms and will not transfer to the CA tax return.