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Well there are "wages" (technically "nontaxable Medicaid waiver payments that qualify as difficulty of care payments"), but I think what you are telling me is that they are "non-reportable"?

 

Is the advice of not including in your tax return such a W-2 (with "0.00" in box 1, 3, 5, etc.) published anywhere by the IRS?

 

Note that if I do NOT follow your advice but just fill out the Step-by-Step as prompted, that it does reduce my CA State tax liability by about $160.  Is that really due to a miscalculation on the actual TurboTax W-2 Form?  The Form verbiage seems pretty clear to me...