A little before 8 a.m. Pacific Time on Friday February 10th 2023, Intuit released a software fix for TurboTax that allowed CA MCTRs of less than $600 to be entered as a 1099-MISC, then flagged as a CA MCTR, and subsequently pass SmartCheck without an error being raised.
By late afternoon that day, the IRS' website finally stated that in most, but not all States, such refunds would not be taxable. The CA-FTB only issued 1099-MISCs to taxpayers who received an MCTR of $600 or more, which combined with IRS procrastination, had previously left those who received an MCTR of less than $600 (and therefore no 1099-MISC from CA-FTB) confused as to how to, or even whether to, report their refund.
