Middle Class Tax Refund

[Tabby1843]

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?

[VolvoGirl]

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.

[Tabby1843]

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.  

[elusiun]

UPDATE-FIGURED IT OUT THANK YOU

[Themindofteyan]

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 

[VolvoGirl]

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.

[Amd5]

What is I don't see middle class tax refund under miscellaneous 

[Amd5]

How do you do this part my return keeps being rejected for the MCTR information 

[Themindofteyan]

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 . 

[Themindofteyan]

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 . 

[Themindofteyan]

Is there a step we are missing can you take us through how you were able to get your returns accepted ? 

[Maximus--6_x]

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?

[LadyBoltz951]

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. 

[Themindofteyan]

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 . 

[Jbueno]

Same here