Get your taxes done using TurboTax

Yes, you will want to amend your returns. This income is non-taxable.  The instructions changed this year and the instructions from my Jan post are outdated.

See this TurboTax FAQ for help with amending.   

You can e-file your 2022 amended federal tax return, but most states require amendments to be printed and filed by mail.   

You can check the status of your amended return here, but allow three weeks after filing for it to show up.   

These are the updated instructions:

If you received a W-2 with $0 in Box 1: 

1. Sign in to TurboTax Online, click Continue your return, then pick up where I left off (if you are using TurboTax CD/ Download, then just open your return on your computer);    
2. Click on Federal Taxes, and then click on Wages & Income;    
3. Under Wages and Salaries, click Edit/Add next to Form W-2;     
4. Click on Add a W-2, and enter the information as reported on your W-2.    
5. After entering all your W-2s, you will see the screen, Let’s check for uncommon situations. Next to Nontaxable Medicaid waiver payments, check the box. 
6. You will enter the amount of Medicaid Waiver Payments into the box asking for the amount of difficulty of care payment you received from IHHS. This will be the same amount reported in Boxes 3 and 5 of your W-2. 
7. When you get to the Earned Income Credit section under the  Deductions and Credits portion of your return, you will be asked if you want to add your Medicaid waiver payment to your income for this credit. You can try it both ways, including it and excluding it from the calculation for the credit and see which way benefits you most.