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IRS: Wait to file taxes if you got California's Middle Class Tax Refund

Many California taxpayers got Middle Class Tax Refunds last year, in amounts ranging from $200 to $1,050 dollars.

Tax accountant Ricardo Alvarez said that's caused some issues with this year’s tax filings.

“What has come up is the questions about, 'Is it taxable in the federal level?' Because it's not taxable in the state level of California,” he said.


The franchise tax board said it sent out more than six million 1099-MISC forms to people who got at least $600.

This is where there’s some confusion.

The IRS said tax filers who got the state payment and the 1099 form should wait to file their federal tax returns — but tax filing season began Jan. 23.

“Now you're talking about millions of people who already filed are going to have to get that corrected,” Alvarez said.

In a statement, the IRS said it is aware of questions about special tax refunds or payments made by over a dozen states last year. "We are working with state tax officials as quickly as possible to provide additional information and clarity for taxpayers," the agency said.


The IRS said they expect to provide further details to as many states and taxpayers as possible this week.

Alvarez said his financial center in Imperial Beach is getting a lot of questions about the 1099 forms.

“People are coming in with those notices. The first thing I tell them is don't concern yourself too much. And if it is taxable, it's not a game changer, it's just a small amount,” Alvarez said.

He said his firm and many other tax preparation organizations are taking the position that the refund, in any amount, is non-taxable at the federal level.

Some Californians are still waiting for their Middle Class Tax Refunds, which are scheduled to be sent out through Feb. 14.

Anyone who got their payment on Jan. 1 or after won't need to worry about the tax questions until next year.

This year’s filing deadline for most taxpayers is Tuesday, April 18, a little later than usual thanks to a weekend and a federal holiday.