California

This is where middle-class California tax refund debit cards expire

Use it or lose it? This is where the middle-class California tax refund debit cards expire



>> THIS IS THE 1099 WE RECEIVED FROM THE STATE ON SATURDAY. REPORTER: THIS HUSBAND AND WIFE WHO ASK US NOT TO USE THEIR NAMES LOOKING FOR ANSWERS. YOU ARE ATTEMPTING TO FIND OUT WHY YOU RECEIVED THIS FORM THAT YOU HAVE TO PAY TAXES ON THE PAYMENT OF THE MIDDLE CLASS TAX REFUND. >> WHAT WAS YOUR REACTION WHEN YOU SAW $700, CALIFORNIA STATE, MISCELLANEOUS? >> I REACTED WITH HER. WE SAID WHAT’S UP? REPORTER: THE PROBLEM? YOU DID NOT EVEN RECEIVE THE MONEY. >> I TOLD MYSELF YOU KNOW THIS IS CRAZY. I WILL NOT CLAIM THAT I GOT $700 WHEN I DON’T HAVE IT AND HAVE TO PAY TAXES ON IT. So you know, that just didn’t make sense to me. REPORTER: AND IF YOU CALL THE FRANCHISE TAX RELATIONSHIP FOR HELP. >> THANK YOU FOR CALLING THE FRANCHISE TAX ASSOCIATION. >> I CAN’T TALK TO ANYBODY. YOU ARE HERE IN SACRAMENTO. HOW COME WE CAN’T TALK TO YOU? REPORTER: THEY EVEN TRYED TO CONTACT THE BANK THAT ISSUES THE MIDDLE CLASS TAX REFUND, MONEY BANK, BUT THEY CAN’T GET THROUGH. >> I THINK IT’S TERRIBLE. I think they need to pull themselves together. REPORTER: KCRA 3 INVESTIGATED WHAT SHOULD PEOPLE DO IF THEY HAVE NOT RECEIVED A REFUND BUT RECEIVED A 1099 IN THE MAIL? THE FRANCHISE TAX RELATIONS HAS NOTIFIED US THAT INDIVIDUAL PAYMENT MAY STILL RECEIVE IN THE MAIL FOR SOME PAYMENTS ISSUED IN 2022. >> I THINK REALLY POSITIVE HERE THAT WE COULD GET THE $700 BEFORE WE FILE OUR TAXES. So if we get the $700 it’s fine, we’ll move on. BUT IF WE DON’T RECEIVE THE 700, I DON’T KNOW WHO TO CALL. BECAUSE I WILL NOT PUT IT ON MY TAXES. AND IF I DON’T CALCULATE MY TAXES, I CAN HAVE DIFFICULTY. YOU KNOW. So I’m just, I guess time will tell how this will play out. REPORTER: BECAUSE THESE REIMBURSEMENT PAYMENTS MAY BE CONSIDERED FEDERAL INCOME, A 10-99 DIFFERENT FORM WILL BE ISSUED FOR PAYMENTS OF $600 OR MORE. IT ALSO TELLS KCRA THAT BECAUSE A TAXPAYER HAS NOT RECEIVED A 1099-MISC, IT SHOULD NOT BE ASSUMED THAT THEIR PAYMENT WILL NOT BE SUBJECT TO FEDERAL TAX. BOTTOM LINE, WHETHER YOU RECEIVE A FORM 1099 OR NOT, don’t ignore this issue, consult the IRS or a tax professional. >> THE STATE OR FEDS, IRS SEND YOU SOMETHING, A LETTER OR SOMETHING, YOU BETTER WATCH OUT. BECAUSE THEY WON’T FALL OUT. REPORTER: THE PAYMENT OF THE MIDDLE-CLASS TAX RETURN IS NOT TAXABLE FOR CALIFORNIA STATE INCOME TAX PURPOSES. THEREFORE, YOU ARE NOT REQUIRED TO REGISTER THE PAYMENT AS INCOME ON YOUR CALIFORNIA INCOME TAX RETURN. HOWEVER, THE FEDERAL GOVERNMENT ACCOUNTS AND TAXES SUCH INCOMES IF THEY EXCEED A CERTAIN DOLLAR AMOUNT. ANDREA: WHAT IF SOMEONE DON’T WANT YOUR PAYMENT OR THINK THEY RECEIVED AN INCORRECT PAYMENT. IS THERE A POSSIBILITY TO OPT OUT? REPORTER: THERE IS AN OPTION TO REFUSE THE PAYMENT. THERE ARE A SERIES OF INSTRUCTIONS YOU MUST FOLLOW DEPENDING ON WHETHER YOU RECEIVED YOUR PAYMENT BY DIRECT DEPOSIT OR DEBIT CARD. YOU MUST ALSO INCLUDE AN EXPLANATION DESCRIBING WHY YOU ARE RETURNING THE PAYMENT. I WILL RECEIVE ALL THIS INFORMATION

Use it or lose it? This is where the middle-class California tax refund debit cards expire


California has issued more than 9.4 million debit cards under the Middle Class Tax Refund program to date, but the money won’t be stored on those cards forever. Haven’t spent your money yet? Don’t worry; there is still time, about three years. After that, the money “returns to the state”. At the time of writing this article, it’s not exactly clear what happens next. | RELATED | Did you get a mid-range tax refund debit card? How to use it, avoid fees. Here’s what you should know. When do mid-range tax refund debit cards expire? The Franchise Tax Board says Middle Tax Refund debit cards will expire in April 2026. “The expiration date should be on the front of every MCTR debit card,” said FTB spokesman Andre LePage. What happens after debit cards expire? “Ultimately, at the end of the program in 2026, existing law requires the return of all unspent funds to the State of California General Fund,” LePage said. “We are currently investigating how to coordinate this legal language with California’s unclaimed property laws.” How does the state plan to break the news that people could lose access to their money in 2026? LePage said provider Money Network will issue letters in March, April and May this year to remind debit card recipients to activate their cards if they haven’t. “Money Network is contractually obligated to send a letter to all MCTR debit cardholders with a remaining balance by the end of 2025 to encourage them to spend the remaining balance before it expires in April 2026,” he said. FTB will also keep track of MCTR debit card balances and “may elect to send their own letters to debit card recipients with remaining balances on non-activated cards in 2024 or 2025.” Taxes on California Inflation Support Payments? Here’s What You Can Do About It California Legislature Wants a Middle Class Tax Refund Audit Negative balance on your California Middle Class Tax Refund debit card? Here’s what that means: California’s inflation relief debit cards are said to have chip technology. So why not? California Inflation Aid: Is Your Private Information Being Sold to Marketing Firms? Here’s whyHere’s why some seniors and others aren’t receiving payments from California’s “inflation relief” programs Inflation Relief? California SSP Grant Boost for Elderly, Blind and Disabled is split over 2 years

California has issued more than 9.4 million debit cards under the Middle Class Tax Refund program to date, but the money won’t be stored on those cards forever.

Haven’t spent your money yet? Don’t worry; there is still time, about three years. After that, the money “returns to the state”. At the time of writing this article, it’s not exactly clear what happens next.

| RELATED | Did you get a mid-range tax refund debit card? How to use it, avoid fees

Here’s what you should know.

When do mid-range tax refund debit cards expire?

The Franchise Tax Authority states that mid-tax refund debit cards expire in April 2026.

“The expiration date should be on the front of every MCTR debit card,” said FTB spokesman Andre LePage.

What happens after debit cards expire?

“Ultimately, at the end of the program in 2026, existing law requires the return of all unspent funds to the State of California General Fund,” LePage said. “We are currently investigating how this legal language aligns with California’s unclaimed property laws.”

How will the state make it known that people could lose access to their money in 2026?

LePage said provider Money Network will issue letters in March, April and May this year to remind debit card recipients to activate their cards if they haven’t.

“Money Network is contractually obligated to send a letter to all MCTR debit cardholders with a remaining balance by the end of 2025 to encourage them to spend the remaining balance before it expires in April 2026,” he said.

The FTB will also be keeping an eye on MCTR debit card balances and will “send their own letters to debit card recipients with remaining balances on non-activated cards in possibly 2024 or 2025.”

More KCRA Mid-Range Tax Refund Coverage

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