Question

Entering the 1099-MISC for the CA MCTR (California Middle Class Tax Refund) increases my California state tax.

Forum|Forum|3 years ago
February 16, 2023
1 reply
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When I enter the 1099-MISC for the CA MCTR (California Middle Class Tax Refund) my Federal Taxes are not changed but my California Taxes increase -- how do I fix that?

M

MayaD

CA MCTR is not taxable on the federal or CA state return.

In the Income section:

Scroll down to Other Common Income.
Select Edit/ update next to Income from 1099-Misc
Select Edit next to the 1099-MISC form
Continue until you get to the screen Does any of the uncommon situations apply?
Check the Box This was a CA Middle Class Tax Refund and continue

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S

ss-mendo-munnyAuthor

When I entered the 1099-MISC for the CA MCTR I did select the "uncommon" box stating that it is the CA MCTR. My Federal Taxes are not changed but my California Taxes INCREASE! On the California Schedule CA Section B line z Turbotax automatically inputted CA payment $700 and CA payment - general welfare exclusion -$700, so I can't subtract the $700 again. Why does this happen? and how do I fix it? If I delete the 1099-MISC my California taxes go back down.

DMarkM1

The IRS decision is "the CA MCTR is not taxable" taxpayers do not need to enter it on their tax return. Go back to the "Wages and Income" and delete the CA MCTR 1099-MISC form information.

Here is the IRS decision for reference.

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