SACRAMENTO, Calif.–California’s credit unions are once again to be on the receiving end of government checks to members.
The California Franchise Tax Board (FTB) has indicated the first wave of California’s Middle Class Tax Refund (MCTR) payments will soon be processed and disbursed to qualified taxpayers as early as Oct. 7, according to the California and Nevada leagues.
As CUToday.info reported earlier, Assembly Bill 192 was signed into law by Gov. Gavin Newsom in July 2022 it authorized the FTB to make a one-time MCTR payment to eligible recipients. These payments will range from $400 to $1,050 for married filing-jointly taxpayers and $200 to $700 for all others depending on their California Adjusted Gross Income (AGI), as well as whether they claim any dependent credits, according to the report.
The leagues said credit unions should note that MCTR payments are in addition to the previous Golden State Stimulus (GSS) payments.
“Credit unions should immediately prepare to begin receiving these MCTR payments and make any processing or system preparations necessary,” the leagues said.
The Details
The CNCUL said additional details credit unions will need to be aware of include:
- Method of Payments. “Recipients will receive their MCTR payments by direct deposit or debit card. Generally, direct-deposit payments will be made to eligible taxpayers who e-filed their 2020 California tax return and received their California tax refund by direct deposit. MCTR debit card payments will be mailed to the remaining eligible taxpayers.”
- Estimated Distribution Dates. “Direct deposit MCTR payments for recipients who received GSS I or II payments are expected to be issued to bank accounts from Oct. 7 – 25, with the remaining direct deposits occurring between Oct. 28 and Nov. 14,” the leagues said. “The FTB expects about 90% of direct deposits will be issued in October 2022.”
- MCTR debit cards are expected to be mailed between Oct. 25 and Dec. 10 for Californians who received GSS I and II payments, with the remaining MCTR debit cards mailed by Jan. 15, 2023. The FTB expects about 95%of all MCTR payments (direct deposit and debit cards combined) to be issued by the end of this year, the league said.
- Identification of MCTR Payments. The leagues noted FTB issued a notice to financial institutions which provides details and instructions regarding the unique indicators that will appear for automated clearing house (ACH) payments and debit cards.
- Collections (Offsets, Withholding Orders, Wage Garnishments, and Levies). “MCTR payments are exempt from any garnishment order, with the exception of orders in connection with child support, spousal support, family support, or a criminal restitution payable to victims,” the league said.
Credit unions must identify an exempt deposit using a “lookback period” during an “account review,” which a credit union must perform at least once. Under the law:
A credit union that attempts to comply with these provisions in good faith will not be subject to liability, the leagues said.
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