IRS Confirms Tax Fate of California Middle Class Refunds

Millions of Californians worried about paying tax on middle class tax refunds have an answer along with other tax deadline relief.

California state flag
(Image credit: Getty Images)

Californians received news that the IRS decided the tax fate of special state payments "stimulus checks" made to millions of people across the country during 2022. In California, those payments were called Middle Class Tax Refunds (or MCTRs). The MCTR program resulted in the state sending out more than $9 billion in surplus funds — benefiting about 31 million eligible residents — according to the California Franchise Tax Board.

Earlier this year, the IRS had asked Californians, and taxpayers in other states, to hold off filing their 2022 federal income tax returns until a decision about the special payments was made. The agency has since announced that it will not tax California Middle Class Tax Refunds.

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Kelley R. Taylor
Senior Tax Editor,

As the senior tax editor at, Kelley R. Taylor simplifies federal and state tax information, news, and developments to help empower readers. Kelley has over two decades of experience advising on and covering education, law, finance, and tax as a corporate attorney and business journalist.