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Level 2
posted Feb 21, 2023 7:34:03 PM

MCTR

The state isn't taxing the  MCTR. But when I enter it in the 1099-misc section line 3 in the federal return, it immediately shows that it is being taxed, because the refund amount goes down.  Since, they say they are not going to tax it, would it be ok to just leave it off the return completely? Please advise.

0 2 263
2 Replies
Level 15
Feb 21, 2023 7:44:31 PM

IRS instructions are to leave that form off entirely. 

Expert Alumni
Feb 21, 2023 7:58:07 PM

Originally it was not clear if the payment would be taxable, so form 1099-MISC's were issued. They will show as taxable income on your federal tax return if you enter it, so now that it has been determined that the payments are not taxable on your federal or state tax return, you should not enter the form 1099-MISC that reports the California Middle Class Tax Refund into TurboTax.