The California Middle Class Tax Refund is a tax refund issued by the California Franchise Tax Board for taxpayers who sent in a 2020 tax return to provide financial relief during unprecedented inflation. An estimated 32 million Californian taxpayers have already benefited from the MCTR. Here’s what our team at Rush Tax Resolution recommends you should know.
Am I Eligible for a California Middle Class Tax Refund?
Eligibility for the California Middle Class Tax Refund is locked behind a few key factors:
- You must have been a Californian citizen for at least six months.
- You must have filed a tax return for 2020 by October 2021.
- You must be a Californian resident when the payment/refund is issued.
- You must not have been claimed as a dependent or must not have been eligible to be claimed as a dependent in the 2020 tax year.
- Your adjusted gross income in California must not exceed the limits set by the FTB here.
Here’s What You May Expect to Receive
The FTB set up a Middle Class Tax Refund estimator to help determine how much you can expect to receive via direct deposit or your Money Network debit card.
Once you have ascertained your eligibility, your refund will depend on your filing status, adjusted gross income ($150,000 or less, $150,001 to $250,000, $250,001 to $500,000, or $500,001 or more), and whether you have claimed any dependents. For example, a head of the household filer with an income of $150,000 or less and dependents may count on an estimated Middle Class Tax Refund payment of $700. The maximum the MCTR may provide is $1,050.
Your refund may be more or less, depending on your state income tax return for 2020.
The payments are being sent out to taxpayers continuously. You can expect to receive either a direct deposit or a debit card issued by Money Network, the Franchise Tax Board’s partner in this endeavor. For any issues and questions regarding the debit card, you can call Money Network via 1-800-240-0223
How Do I Use the Debit Card?
Once you have received your card in the mail, you must activate it before it becomes usable. To do so, call the Money Network hotline at 1-800-240-0223 and press 1. You will need the card ready to recite your card information. You will also need the last six digits of your social security number to activate the card.
What If I Haven’t Received My Tax Refund Payment Yet?
You can call the Money Network hotline via 1-800-240-0223 and ask for an estimated time on your card (or your direct deposit) by pressing 2.
What If My Payment Was Stolen?
Call Money Network immediately via 1-800-240-0223 and press 3. This will begin the fraud verification process. Have your Social Security number ready! You will need to know the last six digits. Do not respond to other messages informing you about a lost payment.
If you have been told that your card was lost or stolen, call Money Network first to confirm. Scammers will use different methods to get taxpayers to relinquish their information and refunds.
Is the Tax Refund Taxable?
The California Franchise Tax Board confirmed that the California Middle Class Tax Refund is NOT taxable by the state but may be taxable as federal income by the IRS. However, the FTB also states that you need not worry about the refund being taxed by the IRS if it is less than $600.
If your refund amounts to more than $600, then the IRS could tax it – but they have chosen not to. For now, the FTB is sending every eligible Californian taxpayer an IRS Form 1099-MISC to report the MCTR as taxable income, to be safe – the IRS confirms that you won’t need these for your MCTR.
Lost Debit Cards and Other Card Problems
Was your card lost or stolen? Be sure to press 3 when calling Money Network. Regardless of whether your card was already activated, you will need to provide the last six digits of your Social Security number when calling about a stolen or destroyed card.
What If You Don’t Want the Debit Card?
If you want to opt for a paper check instead, you may call the Money Network and press 4. This informs the hotline that you do not accept the card terms and want the check mailed.
After confirming your identity via your allotted card number, your Money Network account will be closed, and the Franchise Tax Board will be notified that you would like a paper check instead. However, you may expect this to take longer than receiving the debit card. If you do not know your card number, you must wait for the card to arrive in the mail first.
Again, activating the card requires you to divulge the last six digits of your Social Security number – some Californians aren’t comfortable with this, so they’re given the option to opt out of using the debit card and request a paper check instead.
One last warning to all readers – be wary and keep your wits about you. Don’t answer calls you don’t recognize, and know that scammers can spoof Caller ID to appear to be calling from anywhere and as anyone, including figures or agencies of authority.
Don’t answer emails from the California Franchise Tax Board or the IRS that demand sensitive information, do not open attachments or click links, and verify that any number you call for help is found on the FTB website or go through the website itself to contact Money Network and get the help you need.
Any wave of relief payments will inevitably attract scammers, both automated ones and humans putting in real effort, to swipe and steal your tax refund. If you believe you’ve been the victim of a scam, contact Money Network via 1-800-240-0223 to begin the fraud verification process. The sooner you contact them, the greater your chances you can still secure your tax refund!
Last but not least, if you are facing tax debt or wage garnishment, it is essential to note that your tax refund may be used to pay back taxes without you knowing it.
Money Network can also help you determine whether your payment was already used to pay an outstanding debt – call the number provided, press 5 for General Information, and then press 5 again to determine whether your payment is subject to an ongoing levy/garnishment.
Contact our team to learn more today!