Try this option from this TurboTax Help Article.
- Open or Continue Your Return:
- TurboTax Online/Mobile: Go to W-2.
- TurboTax Desktop: Search for "w-2" and select the "Jump to" link.
- Enter W-2 Information:
- Enter all the information from your W-2 form, except for Box 1.
- If Box 3 has a number instead of zero, enter that number in Box 1.
- Nontaxable Medicaid Waiver Payments:
- On the "Let’s check for uncommon situations" screen, check the box for "Nontaxable Medicaid waiver payments that qualify as difficulty of care payments."
- Enter the amount of Medicaid waiver payments you received in the "difficulty of care payment you received from IHHS" box.
- This amount should be the same as what's reported in boxes 3 and 5 of your W-2.
- Earned Income Credit:
- When you reach the "Earned Income Credit" section in "Deductions & Credits," TurboTax will ask if you want to add your Medicaid waiver payment to your income for this credit.
- You can choose the option that benefits you the most.
