Solved
Error form 1099 Misc California Middle Class Tax Refund-
Has anyone encountered this error on Proseries Basic; It shows "select Yes and amount will be excluded from federal income" when it should be for state only. What to do?
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On the other hand, no reason for clients to pay tax on something that is excluded from income.
The amounts are low enough that, by itself, the MCTR won't generate a CP-2000. But if there are other omissions on the return, it may or may not be included in the computation. I am hoping a lot of California practitioners insist on filing returns paying tax on this today, because that makes it more likely that there will be an announcement from IRS tomorrow.
I advise my clients where we stand on the MCTR for Federal and give them the options...wait...pay tax on it... or exclude, but I lean toward reporting the income, then back it out to prevent the document mismatch. In the end, I let them decide but most will go with my recommendation to exclude.
I just wont check the box in ProSeries that removes the income all together, doing it manually.
I am noticing that taxpayers that receive their debit card in January 2023 are still getting a 1099-Misc for 2022. Since it was not available to them in 2022, it should not be reported on the 2022...but again, for document matching...will put it on the tax return.
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