In response to the severe economic impact of the COVID-19 pandemic, the federal government issued multiple rounds of stimulus checks to help Americans facing financial hardships. Although a fourth round of federal stimulus checks is not forthcoming, Californians can look forward to a new $1,200 stimulus check, known as the Middle-Class Tax Refund (MCTR). Let’s cut into what this means and how it affects residents.
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Middle-Class Tax Refund (MCTR)
The Middle-Class Tax Refund (MCTR) is a one-time payment designed to provide financial relief to Californians amidst rising inflation and economic strain. By mid-2022, inflation rates in the United States had soared to a four-decade high, heavily impacting the cost of living in California. Essential expenses such as food and gas reached unprecedented levels, with gas prices hitting an average of $6.29 per gallon in June 2022.
In response to these financial pressures, California’s Legislature and Governor enacted the Better for Families Act, allowing for the distribution of the MCTR payments. These payments aim to alleviate some of the economic burdens faced by California residents.
How is the Check Calculated?
The Franchise Tax Board (FTB) uses data from individual income tax returns filed for the 2020 tax year to determine the MCTR payment amounts. The calculation is based on a taxpayer’s adjusted gross income (AGI) and filing status. Here’s a breakdown of the stimulus check payment amounts:
Individual Status
| Filing Status | Up to $75,000 (AGI) | Up to $125,000 (AGI) | Up to $250,000 (AGI) |
|---|---|---|---|
| Without dependents | $350 | $250 | $200 |
| With dependents | $700 | $500 | $400 |
Joint Status
| Filing Status | Up to $150,000 (AGI) | Up to $250,000 (AGI) | Up to $500,000 (AGI) |
|---|---|---|---|
| Without dependents | $700 | $500 | $400 |
| With dependents | $1,050 | $750 | $600 |
Surviving Spouse
| Filing Status | Up to $150,000 (AGI) | Up to $250,000 (AGI) | Up to $500,000 (AGI) |
|---|---|---|---|
| Without dependents | $350 | $250 | $200 |
| With dependents | $700 | $500 | $400 |
Receiving Your Stimulus Check
The California Department of Finance audited the distribution process and found that over one million debit cards, worth a total of $611 million, had not been activated by the recipients. The stimulus payments target middle- and lower-class families who have been hit hardest by the rising costs of living.
If you haven’t activated your Middle-Class Tax Refund debit card yet, you will receive an activation reminder letter with detailed instructions. Ensure that your address is updated with the Franchise Tax Board (FTB) if you think you are eligible but haven’t received your debit card.
How to Activate
To activate your MCTR debit card, follow these steps:
- Call 1.800.240.0223 to activate your card, set your 4-digit PIN, and check your balance.
- Review the cardholder agreement, fee schedule, and transaction limits.
- Sign the back of your Middle-Class Tax Refund debit card.
This initiative aims to provide much-needed financial relief to California residents, helping them cope with the increased cost of living.
FAQs
What is the purpose of the Middle-Class Tax Refund (MCTR)?
The MCTR is designed to provide financial relief to Californians affected by rising inflation and living costs.
How is the stimulus amount determined?
The amount is based on the taxpayer’s adjusted gross income (AGI) and filing status from their 2020 tax return.
What if I haven’t received my MCTR debit card?
Ensure your address is current with the Franchise Tax Board (FTB) and wait for the activation reminder letter.
How do I activate my MCTR debit card?
Call 1.800.240.0223 to activate your card, set your PIN, and review the necessary agreements.
Who is eligible for the MCTR?
Eligibility is based on your 2020 income tax return, with specific amounts determined by your AGI and filing status.
