Posted on 01/26/2023 11:46:56 AM PST by BenLurkin
The direct payments have been sent out automatically based on Californians’ 2020 tax information. Now, as they prepare to file their 2022 taxes, some inflation relief recipients will need to report the payments as income, according to the the Franchise Tax Board (FTB).
The first important thing to note, the FTB says, is that there’s a difference here between state taxes and federal taxes. As far as California state taxes are concerned, the Middle Class Tax Refund (MCTR) is not taxable income, a FTB spokesperson told Nexstar. That means you don’t need to claim your inflation relief payment — no matter the size — on your California income tax return.
San Diego-based tax attorney Adam Brewer said the money is indeed taxable when it comes to the federal return, and warns that the $600 number is not a threshold for who has to report the income.
Brewer added that taxpayers should also pay attention to the rate at which the money will be taxed. The payments should be subject to ordinary income tax and not the 15.3% applicable to business income reported using a 1099-MISC.
(Excerpt) Read more at ktla.com ...
Democrat Party buying votes — automatically.
They call it an income tax refund. So it has to be reported. If it was a stimulus maybe not
Exactly. It’s madness.
The author of this article knows nothing - he confuses FICA with income tax.
I would say that if you paid more than $700 in California income tax in 2022, then you might be able to consider it as a partial refund, and not taxable income. If you did not pay tax, it might be treated as a welfare benefit, which is also non-taxable.
Better consult your team of tax lawyers and accountants!
I got a 1099. It’s federal taxable but not state.
I agree, I consider it a partial refund on the many thousands of dollars I paid.
Having said that, the feds will disagree; the thieving bastards. I finally got reimbursement on some fed money they owed me a couple years back, with a statement that I must pay taxes on the interest on the money they held back. Thieving bastards.
I don’t think a San Diego tax attorney has the final say on whether the money is taxable at the federal level. Other articles on the internet say the IRS hasn’t yet made a definitive ruling.
I my case my debit card was drained by thieves before I could use it but I still got a 1099 from the state. I was told I would get a replacement in 6 to 8 weeks and so far it has been 7 weeks.
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