henrysf, I followed the instructions below and it looks ok so far.
I have not e-filed yet, so will know more once I do that.
If you received a W-2 with $0 in Box 1:
- Sign in to TurboTax Online, click Continue to your return, then pick up where I left off (if you are using TurboTax CD/ Download, then just open your return on your computer);
- Click on Federal Taxes, and then click on Wages & Income;
- Under Wages and Income, click Start;
- Click on Work on my W-2, and enter the information as reported on your W-2.
- After entering all your W-2s, you will see the screen, Let’s check for uncommon situations. Next to Nontaxable Medicaid waiver payments, check the box.
- You will enter the amount of Medicaid Waiver Payments into the box asking for the total amount of difficulty of care payment you received from IHHS. This will be the same amount reported in Boxes 3 and 5 of your W-2.
- When you get to the Earned Income Credit section under the Deductions and Credits portion of your return, you will be asked if you want to add your Medicaid waiver payment to your income for this credit. You can try it both ways, including it and excluding it from the calculation for the credit and see which way benefits you most.
