topic CA Middle class tax refund in Get your taxes done using TurboTax

CA Middle class tax refund

Ranger93 — Tue, 10 Mar 2026 06:39:24 GMT

Will the CA Middle Class Tax Refund be taxable to the IRS as income?

Re: CA Middle class tax refund

Bsch4477 — Sun, 02 Oct 2022 00:42:47 GMT

The inflation relief payments are not taxable income for California state tax purposes.

For federal tax purposes, the rebate is a tax refund. If you claim state taxes on your itemized deductions, you will generally need to report the payment as federal taxable income. If you don’t claim state taxes on your itemized deductions, you generally won’t need to report the payment as income on your federal taxes.

The reason for the above is that the rebate means you paid less in state taxes. If you had $1,000 in tax withholding but got a $350 refund, you really only paid $650 in taxes. So if you claimed a $1,000 tax deduction, you have to report the $350 refund as income since your deduction was too big.

Re: CA Middle class tax refund

Ranger93 — Sun, 02 Oct 2022 01:18:17 GMT

Thanks for your answer. Just to be clear for me if I took the standard deduction last year this payment should not be taxable to the IRS. Correct?

Thank you.

Re: CA Middle class tax refund

Bsch4477 — Sun, 02 Oct 2022 03:45:17 GMT

Correct!

Re: CA Middle class tax refund

gdahlin — Tue, 15 Nov 2022 17:54:20 GMT

I have received such a refund, and itemized my deductions. Where do I enter this amount in TTax 2022 Home & Biz for Windows?

Thanks for your help!

Re: CA Middle class tax refund

Bsch4477 — Tue, 15 Nov 2022 18:31:30 GMT

It is not yet clear how the IRS will treat this rebate so do nothing yet. You can’t file for several months so be patient.

Re: CA Middle class tax refund

gdahlin — Wed, 16 Nov 2022 16:02:54 GMT

I'm trying to determine if I need to make an estimated tax payment.

Re: CA Middle class tax refund

bbsm — Fri, 20 Jan 2023 22:10:10 GMT

They are now claiming is not actually a refund, which is why is on 1099 MISC not 1099g

Re: CA Middle class tax refund

DMarkM1 — Fri, 20 Jan 2023 23:24:10 GMT

The Middle Class Tax Refund (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. Be sure to find the "Payers" box on your 1099-MISC to verify that "MCTR" is indicated as the source.

Since 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.

However you should wait for an update to complete and file your returns. In a future update there will be a checkbox to confirm that the payment is for the CA MCTR. On the federal tax return, the MCTR payment will then reflect as a positive amount, as well as a separate negative amount. Therefore, TurboTax software will not treat this payment as federal taxable income.

Re: CA Middle class tax refund

gdahlin — Sat, 21 Jan 2023 01:07:27 GMT

Thanks for the update!

Re: CA Middle class tax refund

mjljjl — Thu, 26 Jan 2023 22:13:44 GMT

Do you know when the update will happen? I will need to file my taxes before Feb 6.

Re: CA Middle class tax refund

Bsch4477 — Thu, 26 Jan 2023 22:38:55 GMT

One post said January 27.

Re: CA Middle class tax refund

tremllojh — Fri, 27 Jan 2023 02:32:16 GMT

Following your answer, I went through the comprehensive 1099-MISC flow to enter the California Middle Class Tax Refund I received. As a consequence, the amount is shown on Schedule 1 and my federal taxes increased as expected. However, my California taxes increased as well which they shouldn't because the CA MCTR is supposedly non-taxable in California. I assume that the TurboTax update you mentioned will correct this. Is this true?

I received the Debit card for the CA MCTR just in January 2023. This raises the question if it should be specified on the 2022 tax return or the 2023 tax return? In the meantime, I received a 1099-MISC from the State of California Franchise Tax Board as well specifying that it is for the calendar year 2022.

I guess I should wait with the submission of my tax returns until the questions concerning the CA MCTR have been answered satisfactorily.

Re: CA Middle class tax refund

zhezhang — Fri, 27 Jan 2023 03:59:15 GMT

The latest TurboTax update (Jan 26) does include the California Middle Class Tax Refund option, and it is considered not taxable.

When you enter the 1099-MISC, on the 3rd page "Does one of these uncommon situations apply?", there is an item:

"This was a California Middle Class Tax Refund. "

If you click this, a note will appear at the bottom of the page:

The California Middle Class Tax Refund (MCTR) will not be taxable on your California or Federal returns.

Re: CA Middle class tax refund

Th1968 — Fri, 27 Jan 2023 11:39:20 GMT

Hi. I tried that…I selected the appropriate box but I’m still getting error messages for my tax returns. They keep getting rejected. It seems like it would be easier just to remove the 1099 misc for MCTR. The bottom message says it’s not taxable for California state or federal anyway. Every time TurboTax check for errors they dont find anything. But when I submit efile my returns they keep getting rejected due to error codes for MCTR . It happened twice to me.

Re: CA Middle class tax refund

whiskeytango — Fri, 27 Jan 2023 16:31:02 GMT

I have had the same issue. Turbo tax checks for errors, says I'm error free and good to go. Upon submission both federal and state were rejected for MCTR errors. I have checked the appropriate boxes, etc. All I can hope is there is some other update released today that will fix this problem. Very frustrating.

Re: CA Middle class tax refund

CarissaM — Fri, 27 Jan 2023 18:49:53 GMT

Please follow the instructions here to contact us, so an agent can review your return.

Re: CA Middle class tax refund

tremllojh — Fri, 27 Jan 2023 18:53:06 GMT

Clicking the "This was a California Middle Class Tax Refund (MCTR)" radio button does not help a bit. The California taxes still include taxes for the MCTR and, thus, remain higher than they should be.

If I understand correctly how California Form 540 and Schedule CA(540) are designed and work, Form 540 starts with the federal AGI and adjustments for differences to the federal tax return are then made by additions and subtractions from Schedule CA(540). Thus, I would expect an entry on Schedule CA(540) increasing the subtractions by the MCTR amount. The way this would work is an entry in Section B, line 8z, column B with the description "California Middle Class Tax Refund" as other income.

Re: CA Middle class tax refund

CAsandles — Fri, 27 Jan 2023 18:56:51 GMT

I deleted my 1099 for the MCTR and reentered it selecting the radio button and it corrected my refund amount.

Re: CA Middle class tax refund

nickweems — Fri, 27 Jan 2023 20:01:29 GMT

FYI - I deleted the 1099-MISC and added it again checking the box for MCTR and then attempted to e-file and it was rejected again.