After you file

My MCTR experience...

 

I entered the info from my CA 1099-MISC for the MCTR $700 (MFJ).  TT accepted it and all appeared good.  Flowed it through to the CA 540 Sch CA etc.  Checked all the forms and everything looked great.  I e-filed the Fed and, REJECTED.  "CA_MCTR_Payment - There is a potential issue with Form 1099-Miscellaneous if you received this form for payment of the California Middle Class Tax Refund."  

 

Called TT for phone support.  The agent looked and declared that everything was perfect.  Must've been a fluke, she said.  I believe her when she said she tried everything her book told her.  Maybe if you don't know, escalate to someone who might.  E-filed again and same reject. 

 

In the meanwhile, I filed CA on the FTB web site (TT forms weren't ready and I didn't want to pay the $20 fee).  Took 10 minutes to enter everything, plus FTB didn't hit me with an underpayment penalty.  All accepted and in the queue in Sacramento (or wherever).

 

Back to Federal.  After some add'l research, all I could find was that the MCTR MAY be subject to federal tax.  Nothing definitive one way or the other.  So I removed it from my federal TT.  e-filed again and it was accepted.  Plus I saved the tax on $700.  Only issue now is that the Fed return #s do not match CA.  If I remove the 540 CA adjustment (since there is nothing to adjust anymore), the end result is unchanged and all is correct.   

 

So maybe I'm one of the first to try this.  I don't have any W-2's so had all my data early. Or maybe there was something else that triggered the IRS reject.