CA Middle Class Tax Refund Update on Federal Return shows non taxable?

Forum|Forum|3 years ago
January 26, 2023
3 replies
18 views

CA Middle Class Tax Refund shows non-taxable on the Federal return, if you use the 1099-MISC information screen. From what I have researched: No Federal guidance, but everything points that the payment is taxable on the Federal Return. Why would CA is a 1099-Misc?

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sjrcpa

Level 15

There are a number of people who don't think it's taxable at the federal level.

Error form 1099 Misc California Middle Class Tax Refund- - Intuit Accountants Community

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

Just-Lisa-Now-

Intuit Community Champion

Im thinking that Intuit tried to program it to automatically deduct on he 540CA if you mark that it is MCTR, but its deducting it from federal....either that or Intuit knows something we dont about the federal taxability of this payment!

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

JRC

Level 7

Why would a State Middle Class tax refund be exempt from Federal tax? Is this a Federal Program and all other 49 States didn't participate?

Just-Lisa-Now-

Intuit Community Champion

Some preparers are arguing that it could be federally excluded under the General Welfare Exclusion, but I havent seen anything official yet.

This was supposed to be a "gas rebate" from the state of CA for our outrageous $7+/gal gas prices last summer, but somehow once they issued it, it became a "refund".

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

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