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If you have a W-2 for IHSS difficulty-of-care payments with zero in Box 1, you don't have to enter $1. There is a workaround in TurboTax for this situation. The IRS is aware of the situation with IHSS W-2s. You might get an audit notice only if there is an amount in Box 1 that isn't reported on your return.

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:

The instructions in this help article, which were recently updated, direct the user as follows:

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 your Form W-2 doesn't include any dollar amount in Box 1 or other boxes, and the payments meet the criteria for exclusion, and you know you don't qualify for the Earned Income Credit or Additional Child Tax Credit, then you don't have to enter the W-2 on your return at all.