I generally don't rely on clients to tell me to do something wrong.  If everyone else is jumping off a bridge, would your mother give you permission to do it also?  $1,050 can make a $225 difference in EIC, even if the income tax bracket is only 10%.  And what if the taxpayer moved to New York after filing a 2020 California return?  Nothing prevented them from getting their payment, right?  Only one state has said it is not taxable.  

The hypocrisy is stifling, with the general attitude being "add it to income if there's a 1099, don't ask don't tell if it's less than $600."  

And then there's the experience we had with IRS a couple years ago, where they said the $150K limit for unemployment exclusion included the unemployment amount, until they said it didn't. 

This isn't an issue requiring disclosure on Form 8275. If someone insists on adding the MCTR, regardless of amount, to every return they file, then that's their decision.  If they only add it to returns where they are afraid of being caught, that's not professional.  But I'll worry about my clients, others can worry about their own.