California’s may be surprised to receive a 1099 if they received more than $600 in State “Middle Class Tax Refunds” in late 2022..
And some Californians may be surprised to receive the news that they were given such payments! Because many people never even opened what look like junk mail when the State of California mailed debit cards in envelopes that looked a lot like a credit card offer. And using the card to people them to log into a private website.
In December 2022, local TV news stations reported widespread fraud involved in these cards because they were so easy to be stolen from the mailbox and verified over the phone.
Now the issue brewing is whether the payments will be considered taxable income in federal returns.
The state has already indicated that they are not taxable under state returns.
The IRS says it was going to issue further guidance on the matter as of February 4, 2023.
Meanwhile Californians may start receiving 1099s for these payments if they earned more than 600.
For now, Californians must wait for the IRS to issue it’s opinion on whether the payments are taxable income on your federal return.
