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Your questions about California’s gas rebate answered

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CalMatters
A gas nozzle in a vehicle at a central Fresno gas station on Sept. 29, 2022.

Lea este artículo en español.

To help with the high price of gas — and the rising cost of living — California started sending payments ranging from $200 to $1,050 to residents in October.

Whenever money might be headed to people’s bank accounts, they tend to have questions.

We’ve already answered the basics, including who is eligible for the payments, when they are getting sent out, how people will receive them, and how much you can expect to receive.

But readers responded with more questions via email and social media. We also took cues from questions people searched for a lot online. We’ve answered some of those questions here, including but not limited to:

    Does it matter how many cars I have, or whether I have an electric vehicle?

    No. Whether or not you’re eligible for this payment — or how much you will get — has nothing to do with whether you own a car, how many cars you own, or what kind of car you own.

    The reason people might be confused is that back in March, Gov. Gavin Newsom proposed sending payments to Californians based on how many cars they own. But that wasn’t part of the final deal.

    Eligibility is based on having submitted a complete 2020 tax return by Oct. 15, 2021, as well as other factors including income and residency.

    Are the “gas rebates” the same as the “inflation relief” payments?

    Basically, yes.

    The idea of financial relief for high gas prices wasfloated by Newsom in March. As the proposal developed it was sometimes referred to as a gas rebate or refund, and sometimes referred to as an inflation relief payment. The official name it ultimately got was the “‘Middle Class Tax Refund.” In most cases, those terms are all referring to payments that started going out in October to offset the high price of gas and other goods.

    One wrinkle: In the wake of a recent uptick in the price of California gas, Newsom proposed a new tax on oil companies in late September and called for a special legislative session in December to discuss the idea. His proposal is to turn the funds generated from that tax into a refund or rebate for people affected by high gas prices, so that’s another gas rebate you might hear about, but it hasn’t happened yet.

    Are these payments taxable?

    The payments won’t be taxable for California state income tax purposes, says Franchise Tax Board spokesperson Catalina Martinez. Martinez said the board would be issuing 1099-MISC forms to people receiving payments of more than $600.

    Whether the federal government will tax these payments is less clear. “That’s an issue where individuals should check with your local tax preparer,” said H.D. Palmer, spokesperson for California’s Department of Finance.

    Why can’t you file something now to get the payment if you didn’t file a 2020 tax return?

    Some people earn little enough income that they aren’t required to file taxes. That includes some seniors and disabled people, as well as some very low income people. Unfortunately, if you didn’t file a 2020 tax return by the deadline, you aren’t eligible for this payment.

    You can’t file anything retroactively to receive the payment.

    If the state allowed people to file amended tax returns, for example, that would have taken more time — both for people to file, and for the state to process — and would have opened up “concerns regarding potential fraud,” said Palmer.

    Basing the payments on previously submitted returns, and documentation that has “already been processed and validated by the [Franchise Tax Board] significantly eliminates the possibility of fraud,” Palmer said.

    Why is your 2020 tax return important? Why not 2021?

    There are two main reasons why the 2020 tax return was chosen, Palmer said. One is that the 2020 tax filing is completely done, whereas tax filing and processing for 2021 is still ongoing. (The extension deadline for 2021 tax returns was Oct. 17).

    The other reason, Palmer said, is that the tax board “received roughly half a million more low-income tax returns than usual in 2020, since more households filed tax returns to take advantage of pandemic-related assistance.” So, by using the 2020 return, California will be able to reach several hundred thousand more people with these payments, according to Palmer.

    What happens if you were married when you filed your 2020 tax return and filed it jointly, but have since gotten divorced?

    Your tax return for 2020 is important for these payments — without one, you aren’t eligible. Plus, the adjusted gross income reported on your 2020 return will factor into how much money you get. The payments are being sent out either as direct deposits or debit cards.

    If you were part of a couple that filed a 2020 tax return jointly, but have since separated or gotten divorced, you will still be issued one debit card jointly with your former spouse or partner, with both names on it, said Martinez. That card would be sent to the most recent address the tax board has on file for the first person named on the 2020 return.

    If your address has changed since you last filed California taxes, you can update your address through MyFTB or by phone, dialing 1-800-542-9332 according to Martinez.

    Same goes for direct deposit: If you filed a 2020 tax return with a partner or spouse you’ve since separated from, the deposit will go to the bank account of the first person named on the 2020 tax return, Martinez said.

    In this situation the formerly coupled taxpayers “should work together to ensure proper handling of the (Middle Class Tax Refund) payment,” said Martinez in a statement.

    What if I’ve moved recently?

    One reader asked about what happens if they were filed a 2020 tax return in another state and then moved to California. If you didn’t file a 2020 tax return in California, you aren’t eligible for this payment.

    Another reader asked what happens if they moved more recently, like this past summer.

    That’s a good question because if you’re expecting to receive a debit card, making sure the Franchise Tax Board has an up-to-date address for you is important. (The payments will arrive either via direct deposit or via a mailed debit card; which one you get depends on what information the Franchise Tax Board has for you.)

    If you’re going to receive a debit card, the tax board will use the most recent address it has on file for you. For many people, that will be the address you put on your 2021 California tax return.

    If you’ve moved recently and you think there’s a chance the tax board doesn’t have your new address, you can update your address through MyFTB or by phone, dialing 1-800-542-9332 according to Martinez. She suggests updating your address as soon as possible.

    What if I’ve changed banks?

    If you’ve changed or closed your bank account since you filed your 2020 tax return and you’re eligible for the payment, you will receive it via a debit card that will be mailed to you.

    If I didn’t get a state tax refund in 2020, am I still eligible for these payments?

    Yes, said Martinez. So long as you filed a 2020 return — and meet the other eligibility requirements — you will get the payment. It doesn’t matter whether or not you got a state tax refund.

    Is there any way to track your payment?

    There isn’t a tracking tool.

    The tax board does provide dates for when they expect to send out each round of payments, which give you a sense of when you’ll receive a direct deposit or debit card. They expect 90% direct deposits to be issued in October 2022. Debit cards are slated to be sent out between Oct. 25 and mid-January — though some Californians got them early by accident.

    If you’re expecting a direct deposit and you haven’t received it by December, or you’re expecting a debit card and haven’t received it by mid-January 2023, Martinez suggests calling the tax board’s customer helpline.

    What should you do if you’re having trouble activating your card?

    You should call the card activation number, which is 800-240-0223, available 24/7, according to the tax board’s website. You should also check out the frequently asked questions about the Middle Class Tax Refund debit cards.

    If for whatever reason you are still having trouble, you can call the Franchise Tax Board’s customer help line, said Martinez. That number is 800-542-9332, and it’s open 8 a.m.-5 p.m. on weekdays, according to the tax board’s website.

    If I was serving in the military and filed a 2020 California tax return as non-resident/part resident am I eligible?

    For more complicated situations like this one, Martinez suggests calling the tax board’s customer helpline, at 800-542-9332.

    How much will you get?

    We’ve made a tool for you to look that up. The Franchise Tax Board also has information, as well as a customer help line, which can be reached by dialing 800-542-9332. The help line has assistance in English, Spanish, Mandarin, Hindi, Vietnamese, Korean, and Punjabi. The board says other languages may be supported by request.

    Explore all national, state and local returns now.