TurboTax is not treating the California MCTR payment as taxable if the user identifies it as such.
In TurboTax Online, when entering Form 1099-MISC, at the screen "Does one of these uncommon situations apply?", select "This was a California Middle Class Tax Refund (MCTR)". At the bottom of the screen, a statement appears that this item will not be taxable on your California or Federal returns.
The IRS just announced today that the payments are not considered taxable and don't need to be entered on the Federal return.
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