California’s pandemic aid programs — the Golden State Stimulus, the Middle Class Tax Refund, rent relief, mortgage relief, and small business grants — have all closed to new applications. One deadline still matters for California COVID relief funds already in people’s hands: prepaid debit cards issued for the Middle Class Tax Refund expire April 30, 2026, and any unspent balance reverts to the state’s General Fund. The other live question for most people is how these payments are taxed, which differs by program and by whether you’re filing a state or federal return.
The MCTR Debit Card Deadline
The Middle Class Tax Refund went out between October 2022 and January 2023 under the Better for Families Act of 2022. Payments ranged from $200 to $1,050 per household, based on filing status, 2020 California adjusted gross income, and whether the recipient claimed a dependent. Single filers with a California AGI above $250,000 and joint filers above $500,000 did not qualify.1Franchise Tax Board. Middle Class Tax Refund
Many recipients received prepaid debit cards instead of direct deposit. Every MCTR debit card account, activated or not, expires on April 30, 2026. After that date, any remaining balance goes back to the state. The last day to request a replacement card is April 8, 2026, which leaves just enough time for printing, mailing, and activation before the program shuts down.2Franchise Tax Board. Help with the Middle Class Tax Refund
If a card is still sitting in a drawer, check the balance and either spend it or transfer it to a bank account before the cutoff. Lost or damaged cards can be replaced up until April 8, 2026.
The Programs at a Glance
The rest of California’s pandemic relief has closed. A short summary is useful mainly for context — for confirming which program a past payment came from, or for checking whether an old payment might still be findable.
Golden State Stimulus I and II
Both rounds required filing a 2020 California return by October 15, 2021.3Franchise Tax Board. October 15 Tax Deadline Approaching to File and Claim the Golden State Stimulus GSS I paid $600 to CalEITC recipients with a Social Security number, $1,200 to ITIN filers who also qualified for CalEITC, and $600 to ITIN filers who did not, capped at a $75,000 California AGI.4California Franchise Tax Board. Golden State Stimulus I and Golden State Grant Payment Report GSS II opened to a wider group with a California AGI between $1 and $75,000 (or $37,500 for married filing separately), paying $500 to $1,100 depending on ITIN status, GSS I history, and dependents.5California Franchise Tax Board. Bill Analysis for SB 139 – Golden State Stimulus II All payments have been disbursed and there is no retroactive application.
CA COVID-19 Rent Relief
The state’s rent relief program, run through the “Housing is Key” portal, paid past-due rent and utilities back to April 1, 2020, for tenants with a COVID-related hardship and household income at or below 80% of the Area Median Income. The application window closed in March 2022.
California Mortgage Relief Program
Funded through the federal Homeowner Assistance Fund and administered by the California Housing Finance Agency, this program paid past-due mortgage payments, missed property taxes, partial claim or loan deferral payoffs, reverse mortgage arrearages, and PACE loans, capped at $80,000 per household.6U.S. Department of the Treasury. California Mortgage Relief Program Term Sheet It no longer takes applications.
Small Business COVID-19 Relief Grants
Run by the Governor’s Office of Business and Economic Development, this program paid one-time grants of $5,000 to $25,000 to businesses and to registered 501(c)(3), 501(c)(6), and 501(c)(19) nonprofits. Initial eligibility required annual gross revenue between $1,000 and $2.5 million, with the ceiling raised in later rounds.7California Grants Portal. California Small Business COVID-19 Relief Grant Program The last application window closed in May 2021.
How These Payments Are Taxed
State and federal treatment don’t line up, and which program the money came from matters.
California State Income Tax
The Golden State Stimulus payments are explicitly not taxable for California purposes.8Franchise Tax Board. California Golden State Stimulus Payments The MCTR is likewise excluded from California income tax.2Franchise Tax Board. Help with the Middle Class Tax Refund California also enacted SB 113 in 2022, excluding small business COVID relief grants from state gross income.
Even when a grant was excluded from state income, fiscal agents still issued Form 1099 documents. If you received a 1099 for a grant that state law excluded, you didn’t have to add it to your California return, but you should have kept the form with your records.
Federal Income Tax
The IRS looks at the substance of a state payment rather than the label. Payments made under state social benefit programs that promote general welfare and are based on individual need are generally excluded from federal gross income.9Internal Revenue Service. IRS Issues Guidance on State Tax Payments The Golden State Stimulus payments, targeted by income and tied to need, fit that framework.
For state payments issued in 2022 (which includes the MCTR), the IRS announced it would not challenge taxpayers who excluded those amounts from federal income. That accommodation applied specifically to 2022 payments.10Internal Revenue Service. Federal Income Tax Consequences of Certain State Payments For payments received in 2023, Notice 2023-56 requires taxpayers to evaluate whether the payment qualifies under a specific exclusion such as the general welfare doctrine, a state tax refund, or disaster relief. Because the MCTR was structured as a tax refund under state law, most recipients who took the standard deduction on their federal return had no federal tax consequence from it.9Internal Revenue Service. IRS Issues Guidance on State Tax Payments
Small business grants sit in a different category. Business grants are generally includable in federal gross income under Section 61 of the Internal Revenue Code, even when the state excludes them. If you received a California small business COVID relief grant and were issued a 1099, that amount was likely reportable on your federal return. Anyone uncertain about a specific payment should review IRS Notice 2023-56 or consult a tax professional.
Grant Recapture and Recordkeeping for Small Businesses
Small business grant recipients have an ongoing compliance obligation. The Franchise Tax Board can collect recaptured grant amounts from any recipient the Governor’s Office of Business and Economic Development determines failed to meet program criteria. Once a recapture amount is identified, it becomes a debt to the state, collectible the same way as a delinquent personal income tax liability, including through levies. Interest accrues on the unpaid balance, and the state Controller can offset any other state payments owed to the grantee against the recapture amount.11California Franchise Tax Board. Bill Analysis AB 152
This is where documentation earns its keep. Hold onto proof that grant money went to eligible expenses: payroll, rent, utilities, and costs of complying with public health rules. A grant with no paper trail is an easy recapture target. Keep these records for at least four years from the date of receipt, which aligns with California’s general statute of limitations for tax assessments.
Looking for a Payment You Never Received
Undelivered state payments can eventually be transferred to the California State Controller’s Office as unclaimed property. The Controller’s office maintains a free search portal where you can look up property held in your name. There is no deadline for claiming transferred property and no fee to do so.12California State Controller. Search for Unclaimed Property If you believe you were eligible for a Golden State Stimulus or other state-issued pandemic payment but never received it, a quick search of the Controller’s database is worth the few minutes it takes.