3514 earned income California

Forum|Forum|3 years ago
January 22, 2023
4 replies
41 views

Hi to all. This is new for me that when Fed AGI is more than earned income of California the calculation of California's EITC is based on FED AGI. I did it as follow for MCTR inflation relief for California adjustment but the client refund decreased since FED AGI become more for $1050 MCTR. Before entering 1099-Misc, California's EITC was more than now. It is unfair.

Open the California return.
Press Ctrl + F on your keyboard to open the forms window.
Type oth, then press OK to open the California Other Income Statement.
Scroll down to line 28.
Enter the amount in Middle Class Tax Refund.

Any help very welcome.

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Best answer by Just-Lisa-Now-

I could not find any box to choose YES or NO. There is a box that already has NO as a default you can not override it. If it is possible place an image of that here. Thanks

If you mark the Other Income box then it auto checks NO, its not MCTR. Uncheck the Other income box and them check Yes and see what happens

sjrcpa

Level 15

Is the MCTR part of federal AGI?

The more I know the more I don’t know.

HOPE2Author

Level 7

Yes, for FED; MCTR is part of AGI but when California wants to calculate 3514 if FED AGI is more than earned income of CA the amount of EITC for CA is FED AGI since it is bigger than earned income of CA. Take a look 3514 instruction.

T

Tiffany4

Level 2

Has it been determined now that MCTR is going to be taxable Fed income? Last I read, it was going to be considered a gift. Did IRS give guidance on this?

Just-Lisa-Now-

Intuit Community Champion

Whoever said the way taxes work is fair?

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

T

TaxGuyBill

Level 15

If you feel that part of California tax law is not fair, you are perfectly welcome to contact your state Congressional representative. They are the ones that make the law.

abctax55

Level 15

Dave Fogel is one of THE smartest tax preparers around, and know CA inside/out:

https://img1.wsimg.com/blobby/go/310b78c2-6a3e-4922-acb3-709b44966191/downloads/CSEA-Fogel-MiddleClassTaxRefund.pdf?ver=1674313102340

His article gives a lot of substantiation to exclude the MCTR from taxable income for Federal purposes.

YMMV & consider disclosures.

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