You are correct certain Medicaid Waiver Payments are excludable from income as @DianeW777 noted earlier. In TurboTax you would not enter the form 1099-Misc directly. Instead use the steps in the link DianeW777 provided "How do I exclude medicaid waiver payments" (extracted below).
"Less Common income>Miscellaneous Income>Other income not reported on a W2...>yes>continue to the page for the Medicaid waiver payment>enter the payment amount from the 1099-Misc"
This automatically puts the amount on form 1040 line 1d "Medicaid Waiver Payments..." so that it can be included in the earned income for any credit/deductions that require earned income. This also automatically adds a negative (-) entry on schedule 1, line 8S (Nontaxable Medicaid Waiver Payment...) to subtract the amount from taxable income.
So by entering one box amount the income is accounted for on your tax forms in the places designated by the IRS, is counted to claim the earned income (for any credits/deductions that require earned income) and then excluded from taxable income.
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