How to cash California’s Middle Class Tax Refund debit card

So, you’re one of the 4.5 million California taxpayers who got a debit card loaded with a Middle Class Tax Refund.

You might have noticed that cashing the card comes with some hurdles.

Transaction hurdles, that is.

To review: The state is sending out $9.5 billion in inflation relief funds to roughly 18 million California taxpayers with adjusted gross incomes of less than $500,000. Nearly 7 million taxpayers already have gotten their refunds via direct deposit. The state says it has issued 4,516,246 debit cards as of Nov. 25. The remaining 6.53 million payments also will reach taxpayers in the form of a debit card between now and January 2023.

The MCTR payment card comes with some caveats.

For those who will tuck the card into their wallet and use it like any other Visa debit card, the process carries no fees. For anyone who prefers to withdraw cash from the card and stash it in a bank account or wallet, there are some extra steps necessary to avoid the fees mentioned above.

Related: Tips and answers for incoming Middle Income Tax Refund debit cards

The cards (stamped with a Golden State grizzly bear) are being issued by New York Community Bank as part of a $25 million contract with card vendor Money Network Financial Inc.

The fee-free "in-network" ATM providers are not traditional banks such as Bank of America, Wells Fargo or US Bank. Instead, the automatic teller machines operate under the networks Allpoint and MoneyPass.

Transferring or withdrawing outside of those two networks will cost cardholders at least $1.25 per transaction. Any non-network ATM will likely charge a fee, too. A traditional bank branch or credit union also could charge a fee for a bank teller (over-the-counter) transaction. (At least one reader told us US Bank would not transact the MCTR card over the counter.)

So, to cash the card after activating it and assigning a PIN number (call 1-800-240-0223), you’ll need to get online and look up an in-network ATM in your neighborhood. The lookup site for in-network ATMs is mctrpayment.com.

Using a ZIP code in Orange, we found that most of the ATMs in the list were located inside drugstores or supermarkets. (Think of those small money machines you see near the entrance of stores aimed at helping those of us who forgot to bring cash or can't use a certain credit card, say, at Costco.) The closest one in our Orange search was at Walgreens less than a quarter-mile from the home office.

Also worth noting: If you receive an MCTR in an odd amount, say $350, watch out for machines that don't provide $5 or $10 bills. You’ll wind up with a balance on your debit card. In that case, we’d suggest buying 2 gallons of 87-octane gas (take that, gas rebate) or spending it at the grocery store on overpriced eggs and butter.

We’ve received a number of emails from readers who say they should’ve received their payments by now. Here's what most of them had in common: They owed money to the state in their 2020 tax returns.

Remember: the Franchise Tax Board is using 2020 tax returns as its MCTR qualifier. Why not the more recent 2021 returns? Because those tax filings were still being processed this fall when the refund distribution began.

So ask yourself, "Did I owe California money in 2021?" If you did, your payment will come later in the MCTR distribution cycle.

Here's the distribution schedule, courtesy of the FTB website:

—Golden State Stimulus I or II check recipients (last name beginning with N – V) Nov. 20 – Dec. 3, 2022

—GSS I or II check recipients (last name beginning with W – Z) Dec. 4-10

—Non-GSS recipients (last name beginning with A – K) Dec. 5-17

—Non-GSS recipients (last name beginning with L – Z) Dec. 19-31

—Direct deposit recipients who have changed banking information since filing their 2020 tax return: Dec. 17-Jan. 14, 2023.

For those still waiting, consider that the state is trying to avoid the $20 billion debacle that was unemployment fraud during the pandemic. An article by KCRA in Sacramento points out this week that some debit cards are not coming with an embedded security chip, something the FTB said couldn't be done in a timely manner for MCTR distribution.

An unidentified FTB rep told the station that "in consideration of the need to deliver debit cards as quickly as possible while addressing fraud control and supply chain issues, FTB has optimized the use of chipped cards and non-chipped cards. This hybrid approach allowed the cards to be distributed months sooner than utilizing debit cards with chips only."

Franchise Tax Board spokesperson Andrew LePage told CalMatters there were "constraints on the number of direct deposits and mailed debit cards that can be issued weekly."

"Logistically it takes time to deliver approximately 18 million payments to Californians effectively and accurately, protecting both taxpayers and California," he said in late October.

If you have trouble with your MCTR debit card, such as errors, or if the card or PIN has been lost, stolen or used without your permission, call customer service at 1-800-240-0223.

How much will I get? Depending on a taxpayer's adjusted gross income, payments will range from $200 for certain high-income earners to $1,050 for married, joint tax filers with a qualifying dependent.

Loosen up: For those who block their phone number to callers, unblock it by dialing (asterisk) *82 before dialing 1-800-240-0223 to activate the MCTR debit card.

Who won't get a payment? In addition to those who earn more than $500,000 in AGI annually, those who don't qualify include folks who didn't file taxes for 2021, including certain seniors and disabled people. Those who can be claimed as dependents for tax purposes also will not get their own payments.

Where do I sign up? You don't, FTB says. Qualified recipients do not have to do anything to get their payment.

Don't throw out the "junk" mail: Watch out for a plain, white envelope with a return address from Omaha, Nebraska.

Need more info? The state has set up a page at the FTB website where residents can check eligibility and how much they will receive.

Get the latest news delivered daily!