I received a 1099-MISC form from the State of CA FTB for the stim check from last year. No effect on my state taxes but is being counted as income on my federal taxes?

sarahschindler · ‎January 18, 2023

I thought that these payments would not be counted as ordinary income. Maybe I am inputting the form in the wrong place? I put it in wages and income.

Critter-3 · ‎January 19, 2023

Good question ... however I have not seen any guidance either way on this matter from the IRS ... it is not taxable to CA is all I know for sure.

In the fed section the 1099-misc is entered as income since a form was produced it must be reported :

Follow these directions to post 1099-Misc, box 3 income not subject to self-employment taxes.

Down the left side of the screen, click Federal.
In the center of the screen, click Income & expenses.
On the screen Your income and expenses, scroll all the way down to the last section, Less Common Income.
Click the Start or Update button for the last topic, Miscellaneous Income, 1099-A, 1099-C.
On the next screen, Let's Work on Any Miscellaneous Income, scroll down and click the Start or Update button for the last topic, Other reportable income.
The next screen asks, Did you receive any other taxable income. Click Yes.
On the next screen, Other Taxable Income, enter a description and the amount. Click Continue.
On the next screen click Done.

The income will be reported on Schedule 1 line 8 with the description that you entered.

In the CA interview look for this screen ...

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Anonymous_ · ‎January 19, 2023

I will page @Critter-3. Please stand by.

Critter-3 · ‎January 19, 2023

Good question ... however I have not seen any guidance either way on this matter from the IRS ... it is not taxable to CA is all I know for sure.

In the fed section the 1099-misc is entered as income since a form was produced it must be reported :

Follow these directions to post 1099-Misc, box 3 income not subject to self-employment taxes.

Down the left side of the screen, click Federal.
In the center of the screen, click Income & expenses.
On the screen Your income and expenses, scroll all the way down to the last section, Less Common Income.
Click the Start or Update button for the last topic, Miscellaneous Income, 1099-A, 1099-C.
On the next screen, Let's Work on Any Miscellaneous Income, scroll down and click the Start or Update button for the last topic, Other reportable income.
The next screen asks, Did you receive any other taxable income. Click Yes.
On the next screen, Other Taxable Income, enter a description and the amount. Click Continue.
On the next screen click Done.

The income will be reported on Schedule 1 line 8 with the description that you entered.

In the CA interview look for this screen ...

sarahschindler · ‎January 19, 2023

Thanks so much!

This is what I did when I inputted the form. From the research I was able to do last night, Google seems to imply that the Federal Government hasn't announced either way whether these payments will be taxable, so I may be waiting to file until they make that decision.

boroffrd · ‎January 19, 2023

I missed that option. Worked great. Isn't it nice that we get taxed on our middle class tax refund.

jsquick · ‎January 23, 2023

@Critter-3 so you don't enter it in the 1099-MISC under federal taxes? The way indicated above under "Other Taxable Income" specifically says "Do not enter income reported on Form 1099-MISC." Please advise.

jsquick · ‎January 23, 2023

@Critter-3 do we leave the CA Middle Class Tax Refund box blank or enter the actual amount that was entered under Federal Taxes?

Critter-3 · ‎January 23, 2023

The screen instructions say to enter the amount reported on the federal return so it can be deducted from the CA return.

jsquick · ‎February 21, 2023

@Critter-3 so is this now not being taxed by the feds? Do we exclude it from Turbo Tax altogether or is there a way to input it into the program without it being taxed? Please advise.

PattiF · ‎February 21, 2023

Yes. You do not have to include the California Middle Tax Refund on your federal or state tax return.

The IRS said it determined it will not challenge the taxability of payments related to general welfare and disaster relief. This means that people in the following states do not need to report these state payments on their 2022 tax return: California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Maine, New Jersey, New Mexico, New York, Oregon, Pennsylvania, and Rhode Island. Alaska is in this group as well, but please see below for more nuanced information.

See IRS issues guidance on state tax payments to help taxpayers

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jsquick · ‎February 21, 2023

@PattiF so we DO NOT even enter it in the Turbo Tax program at all?

PattiF · ‎February 21, 2023

You do not need to enter the form in your return. Don't add to taxes.

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jsquick · ‎February 21, 2023

@PattiF Thanks - I guess I'll just keep it for my own records or rip it up then...

DawnC · ‎February 21, 2023

Keep it with your tax records. The IRS has stated you can exclude payments considered General Welfare and disaster relief payments from your federal return. The CA Middle-Class Tax Refund issued in 2022 is considered one of these payments.

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 either. But you should keep the document with your tax records. @jsquick

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I received a 1099-MISC form from the State of CA FTB for the stim check from last year. No effect on my state taxes but is being counted as income on my federal taxes?