This is an answer I found online from a TurboTax answer -
“If you live with the person you provide care for, the income you earn for providing care services can be excluded from your federal income taxes.
The payments you receive are Difficulty of care payments and can be excluded from taxable income, according to IRS Notice 2014-7.
If you received a form W-2 for these payments, you'll report the form on your tax return. but it will not be part of your taxable income. Here's how:
Enter that form W-2 in TurboTax just like a normal W-2.
Then in the follow-up interview, when you arrive at the page titled Let's check for uncommon situations, put a checkmark on Nontaxable Medicaid waiver payments that qualify as difficulty of care payments and click Continue. On the next page you can indicate how much of the W-2 amount should be nontaxable, which in your case is All of it.
See attached screenshot.
@aznkk82“
I guess it won’t share the picture. I tried to find this but I am not having any luck. The date of the post is only last year … does this help?
