The 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. If 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. There will be a question asking if the payment is for the California Middle Class Tax Refund. Select “Yes” to automatically exclude this amount from federal income. On the federal tax return, the MCTR payment will reflect as a positive amount.
Please fell free to contact Turbo Tax Support if you continue to have issues. Click here for information on Turbo Tax Support.
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