If your W-2 has an amount in Box 3, you will enter that amount in Box 1. Here are the steps provided by TurboTax for entering nontaxable Medicaid Waiver payments:
- Open or continue your return.
- 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.
- Enter all your W-2 info as shown on your form, except Box 1.
- If you have a number instead of zero in Box 3, enter that number again in Box 1.
- 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.
- 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.
- 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.
See the link below for more information:
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