It depends. You would have received these payments from your state or other Medicaid provider for providing care for someone in the same household. In order to receive these non-taxable payments, you would have had to be approved by your state government.
See this IRS Q & A page - Certain Medicare Waiver Payments may be excludable from taxable income. If you were approved by your state, you should be able to get the IRS to properly classify your income according to Notice 2014-7.
Respond promptly to any notice you receive. The IRS may consider the issue resolved (likely in their favor) if you don’t reply by the date in the notice. How you should respond depends on the type of notice you received. Please see this TurboTax FAQ for more information about the types of notices and how to respond.
What to do when you receive a letter or notice from the IRS
TurboTax Audit Support Center
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