State lawmakers decided instead to send tax refunds to low- and middle-income taxpayers, to help ease the pain of inflation.
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Now, millions of Californians are getting those payments in the mail, loaded onto debit cards. But many say the cards look like a scam. Others complain they're full of fees and restrictions.
It is called the Middle Class Tax Refund, and it's bringing up a lot of questions -- why do I have to pay fees to get my cash? Why is the debit card coming from some bank in New York? Most of all, is this card legitimate?
Doris Beers of San Francisco was suspicious when she got this envelope in the mail from something called "Middle Class Tax Refund" with an address in Nebraska.
"I almost threw it out," Beers said. "I honestly thought it was a scam."
She opened it to find a debit card issued by a bank in New York, saying it was her California Middle Class Tax Refund.
"I didn't have any refunds coming from any company I knew of in New York, and it just didn't look official," she said.
California's "Middle-Class Tax Refund" starts hitting bank accounts Friday
But it was.
The card was loaded with a $350 state tax refund -- one of millions of such refunds going out to Californians right now to help ease the pinch of inflation.
The one-time payments range from $200 to $350 per person for those earning up to $250,000.
Still, it bothered Beers. The card came with four pages of rules, restrictions and potential fees -- plus a lengthy cardholder agreement.
"And why, if you're giving someone a rebate, would you charge them to use it?" she said.
Others were skeptical too.
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Mark in San Jose writes: "It's a debit card for Californians, yet the bank is in New York - we are concerned that this is a trick."
Carol in San Francisco writes: "My husband believes this is a scam and now the New York Community Bank has our personal information."
Scammers are already out there trying to fool taxpayers into giving personal information to activate their cards.
So, how can you tell if you've got the real thing?
The envelope looks like the one shown in our video, with a return address in Omaha, Nebraska.
Most importantly, the real card must be activated by calling only this number: 1-800-240-0223.
Do not call any other number claiming to activate the card.
When you call, you'll be prompted to punch in the last six digits of your Social Security Number.
Once you activate, though, watch out for fees.
It costs a $1.25 each time you withdraw money at a non-network ATM, like those at major banks. It's also $1.25 to get over-the-counter cash at a bank.
However, it's free to get cash at Money Network ATMs, located mainly inside grocery and drug stores.
It's also free to use them for shopping.
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Beers just wants a check.
"A bank is making money off these millions of cards and that's taxpayer money going to a bank in New Jersey. That was the last straw for me," she said.
Actually, it's a bank in New York. The state of California is paying Money Network of Georgia $25 million to provide debit cards to about 11 million Californians. The New York bank is a partner.
Check to see if you qualify for the California Middle Class Tax Refund here.
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