topic Since my 1099-misc income is not taxable in California why are my state taxes increasing when I enter the amount of the middle class tax relief amount? in Get your taxes done using TurboTax

Since my 1099-misc income is not taxable in California why are my state taxes increasing when I enter the amount of the middle class tax relief amount?

boroffrd — Mon, 23 Feb 2026 10:43:10 GMT

I know the IRS is taxing the income but the state isn't taxing the income.

Re: Since my 1099-misc income is not taxable in California why are my state taxes increasing when I enter the amount of the middle class tax relief amount?

Anonymous_ — Thu, 19 Jan 2023 15:31:36 GMT

Why is your income not taxable in California?

Re: Since my 1099-misc income is not taxable in California why are my state taxes increasing when...

DianeW777 — Tue, 24 Jan 2023 17:47:20 GMT

You are correct.

Taxable income

The MCTR payment is not taxable for California state income tax purposes. You do not need to claim the payment as income on your California income tax return. The MCTR payments may be considered taxable for federal purposes as indicated above.

If you determine it is not taxable on your federal return, then keep the document but remove or delete it from your federal return.

If it is taxable on your federal return, the when you get to the CA return you can subtract it out using the steps below.

Complete your CA return until you reach the screen 'Here's the income that CA handles differently'
Scroll until you see Miscellaneous > continue scrolling to 'Other Adjustments to Income' > Start or Revisit
Enter your description (MCTR) and enter the amount under the 'Subtraction' column
Continue to complete your CA return (see image below)

@boroffrd

[Edited: 01/24/2023 | 9:45a PST]

Re: Since my 1099-misc income is not taxable in California why are my state taxes increasing when...

JoseHedz2023 — Sat, 28 Jan 2023 21:51:21 GMT

I did this, I will let you guys know if it worked.

Re: Since my 1099-misc income is not taxable in California why are my state taxes increasing when...

BrittanyS — Mon, 30 Jan 2023 17:26:06 GMT

When entering the 1099-Misc in TurboTax, you will want to mark the box stating the 1099-MISC is for the MCTR. You can do this by following these steps:

Click on Wage & Income
Click Edit beside 1099-Misc
Answer interview questions
Under Question "Does one of these uncommon situations apply?" mark This was a California Middle-Class Tax Refund (MCTR)

@JoseHedz2023