The 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. If 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. There will be a question asking if the payment is for the California Middle Class Tax Refund. Select “Yes” to automatically exclude this amount from federal income. On the federal tax return, the MCTR payment will reflect as a positive amount.
Please fell free to contact Turbo Tax Support if you continue to have issues. Click here for information on Turbo Tax Support.
Yes, I have done that, and I'm aware of that. I've "fixed" my return and submitted five separate times, but it's still coming back rejected due to the CA MCTR.
I have same problem. Both federal and state returns rejected twice.
Yes!! I was rejected 3 times as well. I even contacted an ‘expert’ via chat twice. I was told after the 3rd rejection, that they are working on fixing it but it may be after the 28th ( tomorrow ). I asked if we would be notified when it was working correctly and they advised no.
So frustrated! if anyone has luck, please keep us updated! I don’t any to submit again until it’s fixed!
People are posting that Customer Service told them the efile rejection is suppose to be fixed on Monday Jan 30. So try Efiling after Monday.
Yes I’m having the same problem. It’s frustrating. Both returns keep rejecting me. I thought I corrected it. Been on phone w turbo tax people
Same exact thing here it’s frustrating And I’ve paid to have them do the taxes, they need to fix it
This was a last minute change to how that CA item was to be reported on the federal return and they added the step but it still has bugs ... just need to wait for them to get it ironed out.
Hello, has this issue been resolved? Has anyone resubmitted their return and had it accepted yet?
Yes, I think it's resolved. I e-filed both my returns yesterday and both were accepted.
It’s been awhile so I don’t remember the details. But make sure you run through the entire process in that section. Eventually there will be a section that says some things do any of these apply, there will be a list and you will check the box next to I received the California middle class refund (or something along those lines) I had to keep going back to the beginning to get it to run me through the questions. If you have too start at the very beginning and click through. I know it’s not very specific but I hope this helps. Good luck!
This information for the California Middle Class Tax Refund has been updated. You do not need to enter this into your tax return at all.
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