Get your taxes done using TurboTax

Here is a workaround to the $0 in box 1 for IHSS payments. You can do this instead of entering $1.

1. Open or continue your return.
2. Navigate to the W-2 section:
   • TurboTax Online/Mobile: Go to W-2.
   • TurboTax Desktop: Search for w-2 and select the Jump to link.
3. Enter all your W-2 info as shown on your form, except Box 1.
4. If you have a number instead of zero in Box 3, enter that number again in Box 1.  If you ONLY have a number in box 12, you can enter it in box 1 as well.
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.  (If you enter the number in box 12 with code II, you will not see this option, entering it in box 12 will be enough)
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 & 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.

NOTE: When you enter the income as IHSS payments TurboTax will automatically back out your IHSS payments on line 8 of your 1040.   You will see this shown as a negative number so this will NOT be included in your taxable income, however, if you choose it will still be included in your EITC calculations. 

@RobbyG2112 (Edited 2/5/2025 @ 5:19PM PST)