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You can’t e-file your tax return if it shows $0 in income. Since In-Home Supportive Services are not considered taxable income, if that is your only income, you may not be able to e-file your return. You may need to print and mail your return.

Per IRS Notice 2014-7 and the California Department of Social Services, wages received for In-Home Supportive Services by providers who live with the recipient of those services are not considered part of gross income for federal or state income tax purposes. Even though these payments are specifically excluded from income, in a recent court case, it was ruled that Medicaid Waiver Payments are considered "earned income" for purposes of calculating the earned income tax credit. A taxpayer can choose to include Medicaid Waiver Payments as Wages on line 1 of Form 1040 (even if not reported on a W-2) in order to claim the credit. Then an adjustment is entered on Schedule 1, line 8 so the payments are not included in taxable income. Please see the steps below:

1. Log into TurboTax and click on any topic to continue
2. Click on Federal from the menu on the left-hand side and then click on Wages & Income at the top
3. Click Edit/Add next to Job (W-2) and then click on Add a W-2
4. If you received a W-2 for your Medicaid Waiver Payments, enter the information as reported on your W-2. Enter the amount you received for Medicaid Waiver Payments in Box 1 (even if this amount is not reported in box 1 of your W-2.) If you did not receive a W-2, per IRS Form 1040 Instructions, you may still enter the amount of Medicaid Waiver Payments in Box 1 for the purpose of claiming the credit.
5. Continue through the screens until you get back to "Wages and Income" section and then scroll down to Less Common Income and click on Show More
6. Click on Start or Revisit next to Miscellaneous Income and then click on Start next to Other Reportable Income and select "Yes"
7. In the "Description" section, enter "IRS Notice 2014-7 excludable income" and in the "Amount" section, enter the W-2 box 1 amount (or amount of Medicaid Waiver Payments) as a negative (-) number

NOTE: This will both show the W-2 on your return and explain why it is not taxable.

[Edited 02/11/20 | 5:54pm PST]