When entering the 1099-MISC CA MCTR , there will be a question asking if the payment is for the California Middle Class Tax Refund. Select “Yes” to automatically exclude this amount from federal income. Not answering this question correctly could cause errors. To get back to the 1099-MISC screen:Open or continue your returnSelect Search and search for 1099-miscSelect Jump to 1099-misc The MCTR is not taxable on the CA tax return, but no guidance has been provided by the IRS as to whether or not it is taxable on the federal tax return. Therefore, TurboTax software is not treating this payment as taxable income. Once we get more guidance from the IRS, we will notify you of the changes and how to handle them.

Question

I received a 1099-MISC from the State of California from a "middle class tax return" payment, but TurboTax keeps showing error. Sending me to neverending loop.

Forum|Forum|3 years ago
January 27, 2023
2 replies
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SantinoD

When entering the 1099-MISC CA MCTR , there will be a question asking if the payment is for the California Middle Class Tax Refund. Select “Yes” to automatically exclude this amount from federal income. Not answering this question correctly could cause errors.

To get back to the 1099-MISC screen:

Open or continue your return
Select Search and search for 1099-misc
Select Jump to 1099-misc

The MCTR is not taxable on the CA tax return, but no guidance has been provided by the IRS as to whether or not it is taxable on the federal tax return. Therefore, TurboTax software is not treating this payment as taxable income.

Once we get more guidance from the IRS, we will notify you of the changes and how to handle them.

W

walt1099

I guess that's why my submission has been rejected twice already. Although the MCTR1099-misc is entered into the tax forms, it is not considered taxable income for the State of California but it is considered taxable income by the Feds. I have submitted and been rejected twice so far. It does not seem as if the "experts" you chat with are aware of this since they keep telling me to resubmit. The email from "Intuit" told me to try again on the 27th (today), after they perform an update to the system; which I did and it was again rejected. I am now waiting to see if my recent 3rd submission is accepted.

VolvoGirl

Employee

According to Turbo Tax it is not taxable for federal now.

Enter the CA Middle Class Tax Rebate on a 1099Misc and put the amount in box 3. It will show up as Other Income on Schedule 1 line 8z and also as a separate negative amount to zero it out.

Go to Federal > Wages & Income, you might need to continue though the general screens.
When you come to the Wages - Your Income screen click on Add Income or
scroll down to Other Common Income, then 1099Misc.
Put the amount in box 3 and follow the prompts.

The next screen says…..
Do any of the uncommon situations apply? In my Desktop program the 3rd item listed is California Middle Class Tax Refund.

When you click on that then at the bottom it will say....The California Middle Class Tax Refund (MCTR) will not be taxable on your California or federal returns. It will show up as Other Income on Schedule 1 line 8z and also as a separate negative amount to zero it out.

V

Voltron19

I was in the same boat as you. I just resubmitted my Fed return on 01.30.2023 and was accepted. I went to forums and on left hand side of screen, I selected my 1099M. Clicked the checked marked box yes under Middle Class Tax Refund. Than resubmit. Hope that helps!