California Inflation Relief Check / Middle Class Tax Refund FAQ

Content provided for general information. Talk to your tax advisor to confirm the details for your specific situation before taking action.

Here’s what California residents need to do to get their $1,050 inflation relief check and how to solve common problems receiving the Middle Class Tax Refund.

What is the California inflation relief payment or Middle Class Tax Refund?

The California inflation relief payment is a direct payment of up to $1,050. It goes out in fall of 2022.

The payments are a tax rebate that are part of California’s inflation relief package.

How much are the California inflation relief payments?

The inflation relief payments are based on your California income and tax filing status.

Middle Class Tax Refund Payment Amounts

Single filer (no dependents)

IncomePayment
< $75,000$350
$75,000 to $125,000$250
$125,001 to $250,000$200
> $250,000$0

Joint filers (no dependents)

IncomePayment
< $150,000$700
$150,001 to $250,000$500
$250,001 to $500,000$400
> $500,000$0

Head of household or surviving spouse (no dependents)

IncomePayment
< $150,000$350
$150,001 to $250,000$250
$250,001 to $500,000$200
> $500,000$0

Single filer with dependents

IncomeTotal Payment
< $75,000$700
$75,000 to $125,000$500
$125,001 to $250,000$400
> $250,000$0
(The number of dependents does not matter. This is a single additional amount for having one or more dependents.)

Joint filers with dependents

IncomeTotal Payment
< $150,000$1,050
$150,001 to $250,000$750
$250,001 to $500,000$600
> $500,000$0
(The number of dependents does not matter. This is a single additional amount for having one or more dependents.)

Head of household or surviving spouse with dependents

IncomeTotal Payment
< $150,000$700
$150,001 to $250,000$500
$250,001 to $500,000$400
> $500,000$0
(The number of dependents does not matter. This is a single additional amount for having one or more dependents.)

What if I have multiple dependents?

The relief package does not include additional payments for multiple dependents. There is one amount for filers without dependents and another amount for filers with any number of dependents.

Middle Class Tax Refund Estimator

Use this FTB tool to estimate your refund.

Need to make extra money? Check out being a soccer referee or whether jobs like Instacart and Doordash are worth it.

When do you get your California inflation stimulus payment?

Payments will start in October of 2022 and could take until January 2023 to arrive.

Payments will go out by direct deposit to the same account as your state tax refund. If California doesn’t already have your direct deposit information, they will issue a prepaid debit card.

What income counts for the inflation relief payments?

The inflation relief payments are a rebate of 2020 California state income taxes. Your California taxable income for 2020 (tax returns filed in 2021) will determine your payment amount.

The income that counts is your California Adjusted Gross Income. This may be different from your federal AGI.

Remember your AGI isn’t your total income. It’s your income minus your standard deduction, deductible retirment contributions, and other above-the-line deductions.

You can find your California AGI on Line 17 of your 2020 Form 540 or Line 16 of your 2020 Form 540 2EZ.

What if I didn’t file a tax return?

You must have filed a 2020 tax return by October 15, 2021 to receive this rebate.

Exception: If you applied for an ITIN and hadn’t received it by 10/15/21, you must have filed your completed tax return by February 15, 2022.

California hasn’t announced any options for people who didn’t have to file or who filed late.

What if my income went down during 2021 or 2022?

The inflation relief payments are a refund of 2020 taxes. No provisions have been announced to adjust the payments based on your 2021 or 2022 income.

You may want to check back for possible updates during the 2022 tax filing season.

What are the other requirements for the inflation rebate check?

There are a few additional requirements to receive the rebate.

Do you have to be a California resident?

You must both

  • Have been a California resident for at least six months in 2020
  • Be a California resident at the time the payment is issued

Can dependents receive the rebate?

You are not eligible for the Middle Class Tax Refund if you were eligible to be claimed as a dependent in the 2020 tax year. It’s based on eligibility not whether you were actually claimed.

Your dependent status for 2021 or 2022 doesn’t matter.

Do you get an inflation rebate if you pay California taxes but live outside of California?

The inflation rebate payments are for California residents. Non-residents who pay California income taxes are generally not eligible.

What happened to the $400 gas cards?

The $400 gas cards were a proposal that didn’t happen. Lawmakers decided to do the inflation rebate payments instead.

Are the inflation relief payments taxable?

The inflation relief payments are not taxable income for California state tax purposes.

IRS Update 2/10/2023:

The Internal Revenue Service provided details today clarifying the federal tax status involving special payments made by 21 states in 2022.

The IRS has determined that in the interest of sound tax administration and other factors, taxpayers in many states will not need to report these payments on their 2022 tax returns.

During a review, the IRS determined it will not challenge the taxability of payments related to general welfare and disaster relief. This means that people in the following states do not need to report these state payments on their 2022 tax return: California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Maine, New Jersey, New Mexico, New York, Oregon, Pennsylvania and Rhode Island. Alaska is in this group as well, but please see below for more nuanced information.

In addition, many people in Georgia, Massachusetts, South Carolina and Virginia also will not include state payments in income for federal tax purposes if they meet certain requirements. For these individuals, state payments will not be included for federal tax purposes if the payment is a refund of state taxes paid and either the recipient claimed the standard deduction or itemized their deductions but did not receive a tax benefit.

https://www.irs.gov/newsroom/irs-issues-guidance-on-state-tax-payments-to-help-taxpayers

For federal tax purposes, the rebate is a tax refund. If you claim state taxes on your itemized deductions, you will generally need to report the payment as federal taxable income. If you don’t claim state taxes on your itemized deductions, you generally won’t need to report the payment as income on your federal taxes.

The reason for the above is that the rebate means you paid less in state taxes. If you had $1,000 in tax withholding but got a $350 refund, you really only paid $650 in taxes. So if you claimed a $1,000 tax deduction, you have to report the $350 refund as income since your deduction was too big.

What do I do if I don’t get my payment?

If you don’t get your payment, contact the California Franchise Tax Board. Keep in mind the payments don’t start until October and could take until early next year to arrive.

Expect the Franchise Tax Board to post more information about payment timelines and tracking payments around October.

What do I do if I changed my bank account?

You will get a direct deposit to the bank account you used to receive your California tax refund, if applicable. If you changed banks, there is no way to update your bank account information.

Your old bank should reject the payment if you closed your account. You’ll then get a debit card or check in the mail.

What do I do if I changed my address?

If you’ve moved, change your address with the Franchise Tax Board as soon as possible. You may also want to contact the post office to forward your mail.

Don’t forget that this rebate is based on your 2020 tax return. If you moved since then, log in to your FTB account to check your address. Even if you filed for 2021 with your new address, it may not be updated in the system.

If you don’t change your address in time, your payment may go to your old address. Contact FTB to get a replacement debit card or check.

Related: Escape California and Become a Florida Resident

 

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7 thoughts on “California Inflation Relief Check / Middle Class Tax Refund FAQ”

  1. I see that it says if you amended your return or filed after october 15 that you will not get the relief payment. What if I amended my return before october? Would I still be eligible?

    Reply
  2. We got a card in the mail supposedly worth $600. I think it is a scam. We filed by mail, but had our refund sent to our bank.

    Reply
  3. There are people who do recive social securty but don’t make enough to do taxes so that’s really unfair because we try to survive BBB with social security. This is like they don’t care about us

    Reply
  4. will people on social security be receiving an “inflation rebate check” if not working and living on a limited income?

    Reply
    • So far, they’ve only said that you must have filed a tax return. With the previous Golden State Stimulus, Social Security income didn’t qualify since it’s not part of your California taxable income.

      It does seem unfair that Social Security recipients don’t seem to qualify for the new payment if they didn’t file a tax return for other income. You may want to consider writing to your elected representatives about this.

      Reply

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