The procedure outlined by @MonikaK1 should be followed.
Report the income in Box 1 as it is displayed.
At the screen Let's check for uncommon situations, select Nontaxable Medicaid waiver payments that qualify as difficulty of care payments.
The difficulty of care payments will be deducted on Schedule 1 Additional Income and Adjustments to income line 8s and IRS form 1040 line 8.
@Yaba J Daba
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