The ONLY reason IHSS Caregivers are getting Form W-2 is in case they wish to use the income for certain credits.
The choice to enter the W-2 is up to the Taxpayer.
The IRS knows what type of W-2 it is and certainly won't care if it isn't reported.
According to the IRS:
"Other types of earned income. Other types of earned income not reported on Form W-2,..."
"...certain Medicaid waiver payments if you choose to include nontaxable payments in earned income for purposes of claiming the EIC, taxable dependent care benefits,"
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