Middle Class Tax Refund In California Should Not Be Taxed, Says U.S. Senators

U.S. Senators have urged the Biden administration to clarify the exemption of the Middle Class Tax Refund in California from being taxed. State legislators have also voted for this program to be exempted from the state income tax.

Tax Refunds [Photo: Money | HowStuffWorks]

According to an article on Senator Dianne Feinstein’s website, Feinstein and Padilla believe that the Middle Class Tax Refund complies with the three requirements to be excluded from federal income tax liability. These requirements state that the Middle Class Tax Refund must be a program provided by the legislation, be for the benefit of the society, and not be in compensation for any services.

READ ALSO: $8.8 Billion In Financial Relief For Californians: Middle Class Tax Refunds Distributed

Why the Middle Class Tax Refund Should Not Be Taxed

An article on the Sierra Sun Times stated that the legislators of California authorized the payments under the Middle Class Tax Refund and referred to them as economic relief. The Section 10 of the law also states that the Middle Class Tax Refund is authorized to provide financial relief for the residents of California who may have experienced the negative impacts on the economy. With this, Feinstein and Padilla hope that the clarification on whether the Middle Class Tax Refund is exempt from federal income tax would be acted on.

READ ALSO: California Encounters Delays In $1,050 Direct Payments Under Middle Class Tax Refund