I have had some difficulty finding out how to report this waiver income on my tax return. However,
after some research and speaking with an H&R Block consultant, I learned that Certified Family Home payments from the Idaho Division of Medicaid Department of Health used for providing home care to my Down Syndrome sister who lives with me in my principle (only) residence qualifies as a Medicaid waiver program. Hence, these waiver payments are excludable income under Notice 2014-7: "... an eligible individual receiving care in the individual care provider’s home under a Medicaid waiver program is a “qualified foster individual” under § 131(b)(2). ". For the purposes of tax law, IRS Notice 2014-7 defines individuals in these circumstances as "qualified foster individuals". As a result, this income is to be reported on Form 1040 Schedule 1. Since these waiver payments are classified as excludable income, you DO NOT report it as 1099-MISC income because that will classify it as taxable, and in Turbo Tax it requires all that complicated business information which in my situation does not exist! Hence, because you will report these Medicaid waiver payments on Schedule 1, you DO NOT report it as 1099-MISC. It is either one, or the other, but never both. Turns out H&R Block online Deluxe has this awesome feature that you can select: "I want to exclude Medicaid waiver payments under Notice 2014-7 ", and there you simply type in the amount found on the 1099-MISC document. Too bad Turbo Tax does not have a simple, direct way to report this income type.
