California Residents May Be Entitled to a Middle Class Tax Refund

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Plenty of California residents have never heard of the “Middle Class Tax Refund,” let alone received it. But this could be changing according to recent statements from California’s Franchise Tax Board.

Statements made by an agency rep last week indicate another 5,000 middle-class tax refund payments are being issued before the end of the month.

What is the Middle Class Tax Refund?

For those unfamiliar with the middle class tax refund, it’s a one-time payment CA lawmakers passed in 2022 to counteract California’s sky-high gas prices (a situation that has only gotten worse and may indicate more such tax breaks are on the horizon).

The refund program has seen roughly $9.2 billion payments issued to California residents thus far. A figure that includes over 7.2 million direct deposits and about 9.6 million debit cards.

Who’s Eligible For The Middle Tax Class Refund?

The table below (provided by the Franchise Tax Board) illustrates an overview of program eligibility:

Married/RDP filing jointly
CA AGI reported on your 2020 tax return Payment with dependent Payment without dependent
$150,000 or less $1,050 $700
$150,001 to $250,000 $750 $500
$250,001 to $500,000 $600 $400
$500,001 or more Not qualified Not qualified
Head of household or qualifying widow(er)
CA AGI reported on your 2020 tax return Payment with dependent Payment without dependent
$150,000 or less $700 $350
$150,001 to $250,000 $500 $250
$250,001 to $500,000 $400 $200
$500,001 or more Not qualified Not qualified
Single or married/RDP filing separately
CA AGI reported on your 2020 tax return Payment with dependent Payment without dependent
$75,000 or less $700 $350
$75,001 to $125,000 $500 $250
$125,001 to $250,000 $400 $200
$250,001 or more Not qualified Not qualified

What’s Happening With The Outstanding Refund Payments?

Eligible California residents without a middle class tax refund can likely expect payments within the next 30 days.

Here’s a portion of the statement made by Franchise Tax Board spokesperson Andrew LePage explaining the current circumstances and what California taxpayers can expect from this point:

“Although FTB issued the vast majority of all payments by late January this year, we have continued to issue first-time payments based on updated address information and for taxpayers who contacted us to review their eligibility.”

Why Haven’t Eligible California Residents Received Their Refund Yet?

The account auditing and refunding process is still ongoing. As such, the tax board is still identifying qualified refund recipients. La Page also notes that some residents who were issued refunds but never received them may be reissued payments. For example, if a recipient lost their debit card or their payment was sent to an incorrect or prior address and subsequently returned to the agency, they can expect a reissued payment.

Ongoing Problems With MCTR Debit Cards

Based on agency records, 87% of MCTR debit cards issued by the Franchise Tax Board have been activated. But recipients have so far spent less than half of the $4.6 billion in refunds issued on these debit cards.

All of this said many debit card recipients have reported problems with their cards. Activation issues, poor customer service by the company managing the cards, and cards being intercepted and used fraudulently are among the most common struggles.

It’s also important to note the cards are only valid until April 2026. And any funds not subtracted by that date will be forfeited.

Wondering if You’re Eligible For a Middle Class Tax Refund?

If you appear to qualify for the refund based on the table displayed above but have not received a middle class tax refund, you could still be eligible.

You may be one of those who’ve yet to receive their payment. Or there may be a mitigating issue with your finances or tax filing.

If you have questions about middle class tax refund qualifications – Get in touch for a FREE consultation!

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