Get your taxes done using TurboTax

DMarkM1 · ‎January 20, 2023

The Middle Class Tax Refund (MCTR) is not taxable on the CA tax return, but no guidance has been provided by the IRS as to whether or not it is taxable on the federal tax return. Be sure to find the "Payers" box on your 1099-MISC to verify that "MCTR" is indicated as the source.

Since you received a 1099-MISC with the MCTR payment in box 3, you should go through the comprehensive 1099-MISC flow in TurboTax to enter the amount.

However you should wait for an update to complete and file your returns. In a future update there will be a checkbox to confirm that the payment is for the CA MCTR. On the federal tax return, the MCTR payment will then reflect as a positive amount, as well as a separate negative amount. Therefore, TurboTax software will not treat this payment as federal taxable income.

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