Middle Class Tax Refund

[Sk0228]

Just deleted, re-entered and resubmitted . Please work!!!! Keep you posted. 

[Mmdiaz21]

Me too first time. And i was going to pay 180 so that's weird. But my wifes cousin is doing it for us free of charge this year so thats a plus

[Mommyof4girlz]

itll work goodluck!

[Hs9]

Did you happen to notice if they took anything out of federal for that California middle class tax refund? Just was curious. 

[Sk0228]

It didn’t. Federal was just accepted now waiting on State. 

[Hs9]

Geez.. all this work for a refund that isn't even taxed by state or fed lol ok just checking. I removed that 1099 and left it off and am amending it when they allow you to in February.  Glad, all worked out for you, I didn't want to cap out on my rejections and end up having to do a paper one. And didn't have faith TurboTax would get their stuff together in time. Seeing how none of their assistants were helpful with the issue. Congrats! One less stress for 2023 for ya!

[Sk0228]

Both were accepted! Thanks everyone for your help!

[Mommyof4girlz]

@Hs9  rejections dont count on your 5 efiles… its 5 successful efiles not rejections. i had 7 before getting accepted

[ckmk]

Both fed and state accepted on Monday, Jan 30 after 4 rejections previously. Made no changes to 1099 - just  resubmitted. My thanks to everyone who commented and kept the rest of us informed of the status and resolution of this issue. Very grateful.

[ckmk]

I should add that both fed and state were not taxable.

[Dleask555]

So you just re submitted even thought it stated you needed to fix it and it was accepted? I keep getting the middle class error? Did you have to delete the 1099 form and re add it? 

[DianeW777]

It appears some deleted, then re-entered the 1099.  You might want to try that. 

It depends.  The following will provide the steps to enter the income for federal and remove it for California (CA) where it is not taxable.

Taxable income

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.  The MCTR payments may be considered federal income.

If you determine it is not taxable on your federal return, then keep the document but remove or delete it from your federal return. If it is taxable on your federal return, the when you get to the CA return you can subtract it out using the steps below.

1. Complete your CA return until you reach the screen 'Here's the income that CA handles differently'
2. Scroll until you see Miscellaneous > continue scrolling to 'Other Adjustments to Income' > Start or Revisit
3. Enter your description (MCTR) and enter the amount under the 'Subtraction' column
4. Continue to complete your CA return

if you deducted the CA tax on your federal return, as an itemized deduction or as a business expense, then it could be considered taxable income when refunded, if necessary, under the Tax Benefit Rule.

• Tax benefit rule.  IRS Publication 525  You must include a recovery in your income in the year you receive it up to the amount by which the deduction or credit you took for the recovered amount reduced your tax in the earlier year. For this purpose, any increase to an amount carried over to the current year that resulted from the deduction or credit is considered to have reduced your tax in the earlier year.

1099-MISC income tax information (CA Update 2022) Individuals who received a California Middle Class Tax Refund (MCTR) of $600 or more will receive a 1099-MISC for this payment.

@Dleask555 

[DianeW777]

it appears some deleted and then re-entered their 1099.  See the information below.

It depends.  The following will provide the steps to enter the income for federal and remove it for California (CA) where it is not taxable.

Taxable income

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.  The MCTR payments may be considered federal income.

If you determine it is not taxable on your federal return, then keep the document but remove or delete it from your federal return. If it is taxable on your federal return, the when you get to the CA return you can subtract it out using the steps below.

1. Complete your CA return until you reach the screen 'Here's the income that CA handles differently'
2. Scroll until you see Miscellaneous > continue scrolling to 'Other Adjustments to Income' > Start or Revisit
3. Enter your description (MCTR) and enter the amount under the 'Subtraction' column
4. Continue to complete your CA return

if you deducted the CA tax on your federal return, as an itemized deduction or as a business expense, then it could be considered taxable income when refunded, if necessary, under the Tax Benefit Rule.

• Tax benefit rule.  IRS Publication 525  You must include a recovery in your income in the year you receive it up to the amount by which the deduction or credit you took for the recovered amount reduced your tax in the earlier year. For this purpose, any increase to an amount carried over to the current year that resulted from the deduction or credit is considered to have reduced your tax in the earlier year.

1099-MISC income tax information (CA Update 2022) Individuals who received a California Middle Class Tax Refund (MCTR) of $600 or more will receive a 1099-MISC for this payment.

@Dleask555

[Kingrao]

I am still not seeing the Middle Class Tax Refund question on the TurboTax Online edition. Secondly, both my husband and I are listed on the 1099-Misc.  There is no option that shows this refund belongs to the both of us.  It makes you select one or the other.

[Vanessa A]

To enter your 1099-Misc for the Middle Class Tax Refund you will select the following:

• Federal
• Wages and Income
• Show More next to Other Common Income
• Start next to the 1099-Misc
• Enter the information from your 1099-Misc
• Continue
• Enter the reason for the 1099-Misc as MCTR
• Then on the next Screen choose This was a California Middle Class Tax Refund

This will exclude it from your taxable income.

For the person, you can enter it as either one of you if both is not showing as this will not affect anything on your return.