I just received a form 1099-MISC from the Franchise Tax Board for MCTR (Middle Class Tax Refund). I am concerned that I might have to report this for both state and federal returns. A 1099-G is normally issued to report state rebates, credits or offsets. Anyone else received a 1099-MISC?
Yes it is a 1099MISC and is probably taxable on your federal return.
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 which flows to 1040 line 8.
Go to Federal > Wages & Income, 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.
On the page with a long list of reasons pick None of these apply -Continue.
Say No it did not involve work -Continue
You got it in 2022 -Continue
Then on California section you will see HERE’s INCOME THAT CALIFORNIA HANDLES DIFFERENTLY. Scroll down to Miscellaneous and scroll down to MIDDLE CLASS TAX REFUND and follow the prompts to exclude the income from CA.
Thank you for your prompt response. It's taxable for Federal tax returns and nontaxable for state. It makes sense that a 1099-MISC was issued versus a 1099-G.
Thank you so much for your help . I talked to 25 year certified CPA and together we both were lost . You are a saint ! Thank you
There was a new Turbo Tax program update yesterday on Jan 26, 2023. The CA MCTR is now not taxable for federal and state. When you enter the 1099Misc box 3 it should ask ....Do any of the uncommon situations apply? And 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.
What is I don't see middle class tax refund under miscellaneous
How do you do this part my return keeps being rejected for the MCTR information
My return just recently got rejected again after inputting the Ca middle class credit in federal misc . And state . I’m confused I talked with an expert . Who stated it may be a software issue . She stated be patient and give a try Monday to see if system has updated . It’s very possible it’s an internal issue . I’m sure we are all not inputting incorrect information. So I’m going to cross my fingers and wish us all luck .
You may have to sign out and and sign in I did that multiple times and refreshed and later in state at the bottom in section misc it will say Middle Class Tax . Click that box and see if your returns get accepted or rejected . I did speak with a CPA professional this morning who stated it may be ska software issue . She said to give it a try Monday to see if systems have updated. I hope this helped in way .
Is there a step we are missing can you take us through how you were able to get your returns accepted ?
On January 25 I was entering info in Turbo Tax software and the MCTR came up as being taxable income on federal return. On January 26 and today (January 27) Turbo Tax updated their software and now indicated that the MCTR will not be taxable on your California or Federal returns. Any thoughts?
I understand the first rejection. But on the 2nd rejection i entered everything as told and followed the steps and it ad the middle class tax refund box and i marked it but still rejected and now State doesn't recognize?. Going to try again later or Monday. if anyone gets approved with this reply here on how.
I will absolutely update everyone here throughout the day if I get any updates . I can imagine this is frustrating for us all. The payment was small yet this headache is growing .so best of luck and fingers crossed for an update in the system .
It seems a little odd to me that we're all having these issues and turbotax customer service has absolutely no idea about the software update or what MCTR even is. I followed all the steps and got rejected again this morning. I tried for a final time right now, however this is the first time I indicated on my 1099misc that it was the Middle Cladd Tax Refund instead of checking "None of these options apply" so if you're trying again be sure to go into your 1099misc and see the uncommon tax situations and make sure you're checking that it's the MCTR, same with state, you have to locate the Middle Class Tax Refund and then indicate how much you got in 2022.
We are aware of this experience. The issue is being resolved in an update that is scheduled to be released by this week. Please Login to your return early next week and if the issue persists post back here to let us know. Please follow the steps below to review and resubmit your return:
TurboTax online:
1. Log into your account.
2. Select check my return.
3. Select Federal from the left menu.
4. Select Federal Review.
5. Answer the question regarding CA Middle Class Tax Refund.
6. File your return.
In TurboTax CD/ Download
1. Open TurboTax
2. Select Open your return
3. Select Federal Taxes from the top navigation menu.
4. Select Federal Review.
5. Answer the question regarding CA Middle Class Tax Refund.
6. File your return.
Will I need to sign up for the deluxe to enter this information even though it's not self employment?
My return was rejected earlier this week and got "instructions" on how to resolve it. It said that today the 27th there would be some type of software update and to follow those exact instructions. Problem is i tried today and does NOT ask anything about the CMCT and says its ready to file. Not satisfied with this i went back and deleted my 1099 misc and re-did it again. Now it says it will be rejected and the software update will be ready the 30th?
We've identified an issue in your federal tax return. This issue is being resolved in a product release scheduled for January 30th, 2023. On or after January30, 2023. you'll need to sign into TurboTax, complete a quick review (steps below), and resubmit your return. This is just for your federal 1040 tax return.
I just talked to a Tax assistant bc I was rejected twice for both state and federal. He suggested wait it out til the government fixes it and accepts this type of payment. Or.. completely remove that payment from your taxes and amend them later with that form. No taxes are taken out for both state and federal. So it's stupid they are even having people put it on them. Especially when they aren't prepared or updated to accept them. I'm gonna remove it and see if that does anything. Then amend it later. I'm not waiting til they figure things out. Especially with how slow they are to get around to anything.
Is this just a Turbo tax issue? Can we just do our taxes someone else and it go through?
Hi when u removed it , did u get accepted for state and federal ? Thanks
Yes, it accepted federal about 20 mins later and State about 45 mins later.
I dont know if other company's had same issue. I contacted H&R when all this first started and they said you didn't have to do anything put attach a copy of the 1099-MISC. But Turbo didn't even let me do that, so it's in my saved documents just incase. However, making that change both my returns were accepted.