California lawmaker wants an audit of the Middle Class Tax Refunds
>> THIS IS THE 1099 WE RECEIVED ON SATURDAY FROM THE STATE. REPORTER: THIS HUSBAND AND WIFE, WHO ASKED US NOT TO USE THEIR NAMES, ARE DIGGING FOR ANSWERS. THEY’RE TRYING TO FIGURE OUT WHY THEY RECEIVED THIS FORM STATING THEY HAD TO PAY TAXES ON THE MIDDLE CLASS TAX REFUND PAYMENT. >> WHAT WAS YOUR REACTION WHEN YOU SAW $700, STATE OF CALIFORNIA, MISCELLANEOUS? >> I REACTED ALONG WITH HER. WE SAID, WHAT IS GOING ON? REPORTER: THE PROBLEM? THEY HAVEN’T EVEN RECEIVED THE MONEY. >> I SAID TO MYSELF, YOU KNOW, THIS IS CRAZY. I’M NOT GOING TO CLAIM THAT I GOT $700 WHEN I DIDN’T, AND HAVE TO PAY TAXES ON IT. SO YOU KNOW, THAT JUST DIDN’T MAKE SENSE TO ME. REPORTER: AND WHEN THEY CALL THE FRANCHISE TAX BOARD FOR HELP. >> THANK YOU FOR CALLING THE FRANCHISE TAX BOARD. >> I CAN’T GET, TALK TO ANYBODY. THEY’RE RIGHT HERE IN SACRAMENTO. HOW COME WE CAN’T TALK TO THEM? REPORTER: THEY’VE EVEN TRIED REACHING OUT TO THE BANK ISSUING THE MIDDLE CLASS TAX REFUND, MONEY BANK, BUT CAN’T GET THROUGH. >> I THINK IT’S TERRIBLE. I THINK THAT THEY NEED TO TO GET THEIR ACT TOGETHER. REPORTER: KCRA 3 INVESTIGATES ASKED WHAT PEOPLE SHOULD DO IF THEY HAVEN’T RECEIVED A REFUND, BUT DO RECEIVE A 1099 IN THE MAIL? THE FRANCHISE TAX BOARD TOLD US, FOR SOME PAYMENTS THAT WERE ISSUED IN 2022, THE INDIVIDUAL’S PAYMENT MAY STILL BE IN THE MAIL. >> I’M REALLY THINKING POSITIVE HERE, THAT WE MIGHT RECEIVE THE $700 BEFORE WE FILE OUR TAXES. SO IF WE GET THE $700, EVERYTHING’S FINE, WE’LL GO AHEAD. BUT IF WE DON’T GET THE 700 I DON’T KNOW WHO I’M GONNA HAVE TO CALL SOMEONE. BECAUSE I’M NOT GOING TO PUT IT ON, ON MY TAXES. AND IF I DON’T PUT MY TAXES, I CAN BE IN TROUBLE. YOU KNOW. SO I’M JUST, I THINK TIME WILL TELL HOW THIS IS GOING TO PLAY OUT. REPORTER: ACCORDING TO THE FTB, BECAUSE THESE REFUND PAYMENTS MAY BE CONSIDERED FEDERAL INCOME, A 10-99 MISCELLANEOUS FORM WILL BE ISSUED FOR PAYMENTS OF $600 OR MORE. IT ALSO TELLS KCRA IT SHOULD NOT BE PRESUMED THAT BECAUSE A TAXPAYER DID NOT GET A 1099-MISC, THEIR PAYMENT IS NOT SUBJECT TO FEDERAL TAX. BOTTOM LINE, WHETHER YOU RECEIVE A 1099 FORM OR NOT, DON’T IGNORE THIS ISSUE, CONSULT THE IRS OR A TAX PROFESSIONAL. >> THE STATE OR THE FEDS, IRS SENDS YOU SOMETHING, A LETTER OR SOMETHING, YOU BETTER PAY ATTENTION TO IT. BECAUSE THEY DON’T FOOL AROUND. REPORTER: THE MIDDLE CLASS TAX REFUND PAYMENT IS NOT TAXABLE FOR CALIFORNIA STATE INCOME TAX PURPOSES. SO, YOU DO NOT NEED TO CLAIM THE PAYMENT AS INCOME ON YOUR CALIFORNIA INCOME TAX RETURN. HOWEVER, THE FEDERAL GOVERNMENT CONSIDERS THIS INCOME, AND WILL TAX YOU IF IT’S ABOVE A CERTAIN DOLLAR AMOUNT. ANDREA: WHAT IF SOMEONE DOESN’T WANT THEIR PAYMENT OR BELIEVES THEY RECEIVED ONE IN ERROR. IS THERE A WAY TO OPT OUT? REPORTER: THERE IS A WAY TO DECLINE THE PAYMENT. THERE’S A SET OF INSTRUCTIONS FOR YOU TO FOLLOW DEPENDING ON IF YOU RECEIVED YOUR PAYMENT VIA DIRECT DEPOSIT OR DEBIT CARD. YOU WILL ALSO NEED TO INCLUDE AN EXPLANATION THAT DESCRIBES WHY YOU ARE RETURNING THE PAYMENT. I’LL GET ALL OF THIS INFORMATI
Following months of issues with California’s Middle Class Tax Refund payments, the leader of the state’s Joint Legislative Audit Committee is calling for a review of the inflation relief program. Assemblyman David Alvarez, the Democratic chairman of the committee, announced he will pursue a state audit of the Franchise Tax Board’s handling of the payments first promised to taxpayers in response to rising inflation and gas prices early last year. Alvarez said he and other lawmakers are concerned about issues reported by their constituents and a lack of responsiveness from FTB. As KCRA 3 has reported extensively, problems with the program have ranged from concerns of fraud, eligible taxpayers not receiving their payments, and issues with receiving responses from the FTB and debit card vendor used to provide some of the payments, Money Network. “Californians are struggling to deal with rising inflation, higher rents and food costs, and many are counting on refunds promised to them last year to make ends meet,” Alvarez said. “I am hopeful that this audit will provide transparency to FTB’s processes and efforts to ensure Californians are receiving their refunds in a timely and secure manner.” The Middle Class Tax Refund is a multi-billion-dollar program approved by state lawmakers and the governor last year, which was meant to provide payments to taxpayers based on family size and income.”FTB is aware of Assembly Member Alvarez’s request and we look forward to continuing to manage this important program and provide information as we are able to,” a spokesperson for the agency said in a statement. Legislative leaders originally wanted to send payments the traditional way with deposits and checks through California’s Franchise Tax Board (FTB), which is the agency responsible for collecting and administering state income tax. The governor proposed sending debit cards, claiming it would be faster than cutting checks.”I’m skeptical that you could even choose a reliable vendor for debit cards in two months,” Assemblymember Phil Ting, D-San Francisco, told Newsom’s administration in a budget hearing in June. “We agree: We want to get money out as fast as possible, but want to get it out in a way that’s safe and reliable.”Other state lawmakers have said there will likely be scrutiny over the program in other legislative committees this year. More coverage of the Middle Class Tax RefundNegative balance with your California Middle Class Tax Refund debit card? Here’s what that meansWere you told you owe taxes on California inflation relief payments? Here’s what to do about itThieves are draining California’s Middle Class Tax Refund debit cards. Here’s whyCalifornians await answers from Money Network on Middle Class Tax Refund debit card issuesDid you get a California Middle Class Tax Refund debit card? Here’s how to use it, avoid fees
Following months of issues with California’s Middle Class Tax Refund payments, the leader of the state’s Joint Legislative Audit Committee is calling for a review of the inflation relief program.
Assemblyman David Alvarez, the Democratic chairman of the committee, announced he will pursue a state audit of the Franchise Tax Board’s handling of the payments first promised to taxpayers in response to rising inflation and gas prices early last year. Alvarez said he and other lawmakers are concerned about issues reported by their constituents and a lack of responsiveness from FTB.
As KCRA 3 has reported extensively, problems with the program have ranged from concerns of fraud, eligible taxpayers not receiving their payments, and issues with receiving responses from the FTB and debit card vendor used to provide some of the payments, Money Network.
“Californians are struggling to deal with rising inflation, higher rents and food costs, and many are counting on refunds promised to them last year to make ends meet,” Alvarez said. “I am hopeful that this audit will provide transparency to FTB’s processes and efforts to ensure Californians are receiving their refunds in a timely and secure manner.”
The Middle Class Tax Refund is a multi-billion-dollar program approved by state lawmakers and the governor last year, which was meant to provide payments to taxpayers based on family size and income.
“FTB is aware of Assembly Member Alvarez’s request and we look forward to continuing to manage this important program and provide information as we are able to,” a spokesperson for the agency said in a statement.
Legislative leaders originally wanted to send payments the traditional way with deposits and checks through California’s Franchise Tax Board (FTB), which is the agency responsible for collecting and administering state income tax. The governor proposed sending debit cards, claiming it would be faster than cutting checks.
“I’m skeptical that you could even choose a reliable vendor for debit cards in two months,” Assemblymember Phil Ting, D-San Francisco, told Newsom’s administration in a budget hearing in June. “We agree: We want to get money out as fast as possible, but want to get it out in a way that’s safe and reliable.”
Other state lawmakers have said there will likely be scrutiny over the program in other legislative committees this year.
More coverage of the Middle Class Tax Refund
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