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Get your taxes done using TurboTax
If box 1 is $0, it doesn't matter what is shown for social security and Medicare wages or withholdings. You simply leave the entire W-2 off your return, unless it will affect other credits on your tax return.
You need to add your wages to Box 1, Form W-2. If you have no wages listed in Box 1 of your W-2 form you will need to enter your wages so that they are included for earned income tax credit (EITC). Box 3 and Box 5 would show your social security and Medicare wages, which should be the same as Box 1. It would be best to check with your employer to be sure there is no difference in the wages for any reason such as fringe benefits as example.
Once you know the number you should enter it in Box 1 so that TurboTax knows you have wages that qualify for IRS Notice 2014-7 excludable income.
Likewise you still enter the negative income to remove it from taxable income. This will allow it to be reviewed in TurboTax for the EITC.
Note: These wages are included as earned income for earned income tax credit (EITC) even if you do not include those wages as taxable income.
If your payments qualify to be excluded you should complete your tax return.
- Medicare Waiver Payments Exclusion
- IRS Publication 596 (will show the income chart for EITC)
- Form 1040 Instructions, page 40.
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