When your W-2 has zeroes in all of the boxes except Box 12a, with code ll, that amount is your Medicaid Waiver Payments that are excluded from your income. To determine if you want to include this income on your tax return for your Earned Income Tax Credit, when you get to that section, you can elect to add the income or exclude it. Try both ways to determine which way gives you the greater EIC.
Follow the steps below to enter your W-2
- Open TurboTax
- Select Federal Taxes
- Select Wages & Income
- Select Work on W-2
- Enter your W-2, at the Let's check for uncommon situations; check the box next to Nontaxable Medicaid waiver payments
- Continue following the prompts.
Review the TurboTax Help article How do I enter my tax-exempt Medicaid waiver payments from IHSS in TurboTax? for navigation instructions.
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