California Stimulus Checks: Are The Payments Taxable? Check If You Are Eligible

October 30, 2022 Emma Grace Stimulus Check 0

FTB and Money Network Some taxpayers will receive their payment on a debit card. FTB has partnered with Money Network to provide payments distributed by debit card. Visit the How you'll receive your payment section for more information.

Californians are already getting the third batch of payments this week. The question now is are the payments taxable? Suppose you receive a California stimulus payment this year by direct deposit or debit card.

In that case, it won’t be considered taxable income on the California income tax return you’ll file next year. That’s according to the California FTB.

However, it’s not clear at this point if it will be taxed on your federal tax return. As the Los Angeles Times reports(opens in new tab), it depends on how Uncle Sam classifies the payments.

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Suppose they’ve deemed tax refunds (after all, the payments are officially called “Middle-Class Tax Refunds”). In that case, people who itemize on their federal return instead of claiming the standard deduction could have to pay federal tax on the payment.

On the other hand, if the IRS sees the California stimulus payments more as a “gift” or “welfare” payments, they shouldn’t be taxed at the federal level. At this point, it’s better to assume the payment will be subject to federal taxes.

However, before filing your 2022 federal tax return next year, consult with a tax professional to see if IRS guidance has been issued stating that the payments are exempt from tax.

FTB and Money Network Some taxpayers will receive their payment on a debit card. FTB has partnered with Money Network to provide payments distributed by debit card. Visit the How you'll receive your payment section for more information.

Overview

The Middle Class Tax Refund (MCTR) is a one-time payment to provide relief to Californians.

If you are eligible, you will automatically receive a payment. Payments are expected to be issued between October 2022 and January 2023.

For questions or to activate your card, visit the contact information on this page.

FTB and Money Network

Some taxpayers will receive their payment on a debit card.

FTB has partnered with Money Network to provide payments distributed by debit card.

Visit the How you’ll receive your payment section for more information.

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