Why is the amount on the 1099-MISC from State of California Franchise Tax Board DIFFERENT from the amount on my 2021 return?

[jessicasiena67]

Why is the amount on the 1099-MISC from State of California Franchise Tax Board not the same amount on my 2021 return?

[VolvoGirl · Accepted solution]

The 1099Misc is not for your 2021 refund.  It does not show up anywhere on your 2021 return.  The 1099Misc is for the CA Middle Class Tax Refund you got in 2022.  

You would get a 1099G for a state refund.

Enter the CA Middle Class Tax Rebate on a 1099Misc and put the amount in box 3. It will show up as Other Income on Schedule 1 line 8z and also as a separate negative amount to zero it out.

Go to Federal > Wages & Income, you might need to continue though the general screens.
When you come to the Wages - Your Income screen click on Add Income or
scroll down to Other Common Income, then 1099Misc.
Put the amount in box 3 and follow the prompts.

The next screen says…..
Do any of the uncommon situations apply? In my Desktop program the 3rd item listed is California Middle Class Tax Refund.

When you click on that then at the bottom it will say....The California Middle Class Tax Refund (MCTR) will not be taxable on your California or federal returns. It will show up as Other Income on Schedule 1 line 8z and also as a separate negative amount to zero it out.

On my 1040 schedule 1 line 8z it is now labeled CA payment 700 and the next line it says CA payment - general welfare exclusion -700.  So a net 0.

You don't have to do anything on the California return.  It will be excluded automatically.

[jessicasiena67]

Thank you very much!!

[jessicasiena67]

Is the CA MCTR taxable???

[VolvoGirl]

Well Turbo Tax is saying it is not taxable but we haven't heard officially from the IRS.  

[jessicasiena67]

Interesting...My expected refund definitely just went done after I entered the $700 I received. Any advice?

[SharonD007]

Review your entry of your 1099-MISC for the Middle Class Tax Refund (MCTR) to ensure that you selected This was a California Middle Class Tax Refund (MCTR). This selection ensures that your Middle Class Tax Refund is not taxable on your federal return. Here are the steps:

1. Launch TurboTax and select Wages & Income
2. Scroll down to Income from Form 1099-Misc and select Edit/Add
3. Select Edit next to your Form 1099-Misc from the MCTR
4. Select Continue until you get to “Does one of these uncommon situations apply?” and select This was a California Middle Class Tax Refund (MCTR).

This process will ensure that your MCTR is not taxable.

[jessicasiena67]

SO HELPFUL!!