In TurboTax (TT), enter at:

- Federal Taxes tab

 - Wages & Income

-          “I’ll choose what I work on” Button

Scroll down to:

-Less Common Income

      -Misc Income, 1099-A, 1099-C

On the next screen choose other reportable income (at the bottom)

For description enter “Notice 2014-7” . Enter the amount with a minus sign (-) in front of it

Reference:   https://www.irs.gov/Individuals/Certain-Medicaid-Waiver-Payments-May-Be-Excludable-From-Income

If TT tries to give you the  Earned Income Credit (EIC) , based on that income, see this TT FAQ https://ttlc.intuit.com/questions/2635384