California issued $9.2 billion to 16.8 million residents to relieve the rising costs of inflation. The payment is known as the “Middle Class Tax Refund.” It has finally been determined that the payments will not constitute taxable income for either California or the federal government. California’s position was clear from the time the funding legislation was enacted on June 30, 2022. However, the IRS delayed its determination until February 10, 2023, well after the tax season started. The late timing received scathing criticism from the National Taxpayer Advocate.
The income threshold levels for the Middle Class Tax Refund are as follows:
Married/RDP filing jointly | ||
CA AGI reported on your 2020 tax return | Payment with dependent | Payment without dependent |
$150,000 or less | $1,050 | $700 |
$150,001 to $250,000 | $750 | $500 |
$250,001 to $500,000 | $600 | $400 |
$500,001 or more | Not qualified | Not qualified |
Head of household or qualifying widow(er) | ||
CA AGI reported on your 2020 tax return | Payment with dependent | Payment without dependent |
$150,000 or less | $700 | $350 |
$150,001 to $250,000 | $500 | $250 |
$250,001 to $500,000 | $400 | $200 |
$500,001 or more | Not qualified | Not qualified |
Single or married/RDP filing separately | ||
CA AGI reported on your 2020 tax return | Payment with dependent | Payment without dependent |
$75,000 or less | $700 | $350 |
$75,001 to $125,000 | $500 | $250 |
$125,001 to $250,000 | $400 | $200 |
$250,001 or more | Not qualified | Not qualified |
If you have questions or concerns about how these new reports may affect you or your business, please contact the Burton Law Firm at 916-822-8700 or email info@lawburton.com for a consultation.
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California has required employers to “indemnify” employees for “necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer” in substantially the same terms since 1937 under Labor Code § 2802.
