You do not need to make any adjustments or zero anything out. TurboTax has boxes to check to say this is the MCTR and will handle it without any manual changes. To enter your 1099-Misc for the Middle Class Tax Refund you will select the following:
- Federal
- Wages and Income
- Show More next to Other Common Income
- Start next to the 1099-Misc
- Enter the information from your 1099-Misc
- Continue
- Enter the reason for the 1099-Misc as MCTR
- Then on the next Screen choose This was a California Middle Class Tax Refund
This will exclude it from your taxable income.
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