MonikaK1
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Get your taxes done using TurboTax

Do you have multiple Forms W-2 for providing IHSS services (e.g. for each parent), that are issued under the same Employer ID number?

If so, you can add the Box 14 amounts together and just enter one W-2; delete the other one. You can only have one W-2 with an employer's EIN.

 

If the IHSS payments you received qualified as "difficulty of care" payments as explained in IRS Notice 2014-7, they may be excluded from income. 

 

If your Form W-2 doesn't include any dollar amount in Box 1, and the payments meet the criteria for exclusion, then you don't have to enter the W-2 on your return at all.

 

You may choose to include all (or none), but not part, of these payments in earned income for determining the EIC or the ACTC, if these payments are otherwise earned income (wages or income from self-employment).

 

See here for questions and answers from the IRS on this topic.

 

Many Forms W-2 issued for IHSS - IRS Notice 2014-7 income now show zero in Box 1, to indicate that it isn't subject to Federal income tax, but show the entire amount of wages paid in Box 3, Social Security wages. If you have an amount in Box 3, and you might qualify for Earned Income Credit or Additional Child Tax Credit, follow the instructions in this help article, which were recently updated:

 

  1. Sign in to TurboTax and open your return.
  2. Select Search, enter w-2, and select Jump to w-2.
  3. Enter all your W-2 info as shown on your form, except Box 1 (this is assuming that the W-2 Box 1 is blank or zero).
  4. Enter the amount reported in box 3 of your W-2 in Box 1.
  5. On the Let’s check for uncommon situations screen, select the box next to Nontaxable Medicaid waiver payments that qualify as difficulty of care payments.
  6. Enter the amount of Medicaid waiver payments into the difficulty of care payment you received from IHHS box.
    • This is the same amount reported in boxes 3 and 5 of your W-2.
    • Your payments are nontaxable, but TurboTax uses this number to calculate credits you may qualify for.
  7. When you get to the Earned Income Credit section in Deductions and Credits, we’ll ask if you want to add your Medicaid waiver payment to your income for this credit. You can answer based on what benefits you most.

If you follow these steps, you are entering income and then backing out the income, so that it isn't backed out twice, and so that you are not entering a zero in Box 1 which may prevent e-filing.

 

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