In the middle of the year it was announced that California would grant money to vehicle owners to help with the out-of-pocket imbalance due to inflation and the high costs of products, especially gasoline. Later, lawmakers opted to help low- and middle-income Californians through a state stimulus check known as the Middle Class Tax Refund (MCTR).
The money has started coming in for some Californians, but it has also created a lot of confusion among those who either haven’t received their money, or are getting a prepaid card instead of a check.
Governor Gavin Newsom announced in October that he was beginning a one-time delivery of $9.5 billion in direct aid that would benefit up to 23 million Californians regardless of immigration status.
Refunds vary, depending on the number of people in the household and income; so be prepared to receive a card from $200 to a maximum of $1,050 per family.
Qualifiers need to do absolutely nothing as the money will arrive in the mail. Payments will continue to be sent through January 2023.
An Urban Institute report published in November found that mixed-status families who received stimulus checks in the past said it significantly helped them meet their basic needs and avoid a housing crisis.
With the arrival of the Covid-19 pandemic and the economic crisis, families were forced to use personal funds for difficult times, seek multiple sources of support, file taxes as soon as possible and accept stimulus funds despite the immigration concerns.
Several participants claimed that the payments helped them avoid eviction and avoid accumulating more debt.
Most respondents felt it was risky to receive stimulus checks due to fears of immigration consequences, all based on misinformation circulating in the community. Despite their fear, most chose to receive the funds, resolving to deal with the possible consequences later.
The “Do it for your children” report also found that many people felt the need for accurate information and to identify credible entities and organizations that could help them support the well-being of their children.
Prepaid card details
Despite the fact that the aid is significant for taxpayers and mainly for families in need, problems have arisen such as not knowing what the envelope that arrives by mail looks like. Several people have expressed skepticism because the mail is sent in an envelope with a Nebraska return address and the prepaid card belongs to a New York bank.
The card is real and when you receive it you must activate it by calling 1-800-240-0223. Do not dial any number other than this one specifically. There they will ask you to include the last six numbers of your social security number.
Check which ATMs you can use your card as there are some that will charge you around $1.25 to withdraw money from those that are out of network, such as those from major banks.
If you wish to obtain cash, you will also be charged approximately $1.25.
It is free to get cash at Money Network ATMs, located mainly inside some supermarkets and pharmacies. Otherwise it will cost you about $1.25 to get over-the-counter cash at a bank.
Another problem is for people who move home and the envelope arrives at the previous address. To avoid this problem, it is recommended that people make sure to change their address on the United States Postal Service (USPS) website so that their emails are redirected.
You can change your address by visiting the United States Postal Service (USPS) page.
How it affects your taxes
The California State Franchise Tax Board page indicates that the MCTR payment is not taxable for California state income tax purposes.
This means that if you receive the stimulus money, you do not need to claim the payment as income on your state income tax return.
The payments do qualify as federal income. For this reason, a 1099-MISC form will be issued for payments of $600 or more. It is recommended that you consult with the IRS or your tax professional regarding the federal tax treatment of these payments.
To find detailed information on MCTR, if you qualify, and how much you qualify for, visit: https://www.ftb.ca.gov/about-ftb/newsroom/middle-class-tax-refund/index.html# receive