Tax Planning

Middle Class Tax Refund Debit Card Fraud - What You Need to Know

Middle Class Tax Refund Debit Card Fraud - What You Need to Know

In October, the State of California began mailing debit cards and issuing direct deposits to those eligible for the Middle Class Tax Refund (MCTR). 

Qualified residents were granted one-time payments between $400 and $1,050 for couples who filed jointly or between $200 and $700 for those who filed individually. The amount was based on 2020 tax return information. 

Initially, many recipients reported problems with activating their debit cards. The Los Angeles Times shared a story from Jose Ahumada, who has found himself unable to use his $350 tax refund to pay for daily essentials like groceries, gasoline, and credit card payments. 

Credit: G. Chutka/Getty Images

He told the Times, "The website and customer-service numbers don't provide any help or assistance, and the only way to activate the card is via phone."

Now, the activation issues seem to have been resolved, but some individuals are experiencing fraud incidents with their debit cards. 

Sacramento's KCRA 3 shared details about the ongoing issues, nothing that one person their team spoke to saw spending from Laguna Niguel and Newark, New Jersey. Another individual had fraudulent charges in Burbank, while others experienced unauthorized payments in Anaheim and Orange County. 

According to the outlet, some debit card recipients have used the card once or twice only to find it empty mere days later. In other cases, people say they never even used their cards, but hundreds of dollars have been spent in their names.

Lawmakers want answers. 

KCRA spoke to Republican Assemblyman Jim Patterson, who said he has heard complaints from his constituents near Fresno, "This is becoming an embarrassing routine for the state of California."

Credit: Slobo/Getty Images

Although the tax rebate fraud issue is being looked into by state officials - who indicate it is "not a widespread issue" - there are a few ways to get help now if you need assistance:

  • Visit the Franchise Tax Board website. The official website of the California Franchise Tax Board (FTB) provides details about the Middle Class Tax Refund. You can find eligibility requirements and information about how to determine the amount you are owed. The site directs Californians to call 800-542-9332 for help. 
  • Visit the MCTR Payment website. The official website of the Middle Class Tax Refund debit cards offers more information for those who are struggling with activation. It directs Californians to call 800-240-0223 and provides details about spending limits and fees. Online account access is also available.
  • Contact the Franchise Tax Board another way. The FTB offers a variety of contact methods, including live chat, email, and county-by-county phone numbers. Visit the department's contact page for more information.

If you are eligible for the MCTR but haven't yet received your funds, don't worry. Authorities have stated that the last payments aren't likely to arrive until January 2023. 

Have you experienced MCTR fraud?

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Steward Financial

Steward Financial

Jon Osborn is a tax preparer based in San Dimas, California. His company, Steward Financial Services, offers a broad range of tax preparation, accounting and business consulting for small businesses. He loves to work with clients who are looking for answers to complex tax and business planning issues. He has owned several small businesses and worked with over one hundred small business owners. He helps his individual and business tax clients find the best ways to spend their money in order to minimize IRS tax. Small businesses looking to grow, sell or just increase cash flow are one of Jon's specialties.

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