Several US states have been providing rebates to residents under various programs.
In California, the state’s Middle-Class Tax Refund (MCTR) initiative has been sending rebates since the fall of 2022.
These rebates range from $200 to $1,050 depending on income, dependents, and filing status. While the funds provide some relief for inflation, taxpayers were caught off guard when the California Franchise Tax Board announced that it is required to issue a 1099-MISC tax form if the rebate amount is $600 or more.
Some taxpayers expressed surprise upon receiving their 1099 forms, expressing their displeasure on social media. The FTB has issued guidance for those who received a rebate worth $600 or more but haven’t received a 1099-MISC form when they should have.
Eleven states, including Illinois and Georgia, also issued rebates in 2022, which could be taxable depending on the state. Taxpayers should make sure they keep a record of payments worth $600 or more to check whether they should be reported.
The issuance of rebates continues in some states.
In California, which is sending out a batch of payments to debit card recipients whose addresses have changed since filing their 2020 tax return. The issuance will continue through February 14. Meanwhile, Idaho is sending out rebates worth between $300 and $600, or 10% of a taxpayer’s 2020 income taxes, whichever is higher.
By March 31, it expects to issue 800,000 payments. Connecticut is also sending bonus checks worth up to $1,000 to private sector employees who worked during the height of the pandemic.
Taxpayers are advised to consult a tax professional if they are unsure whether their rebate is taxable.