Thank you for your response. I am going to go ahead and leave off the W2 and add the positive/negative entries.
Also, I have read the IRS instructions as it states exactly what you said, and it seems like it contradicts itself, unless I am misinterpreting it.
Per IRS instructions 1040 (2019):
"Certain Medicaid waiver payments you received for caring for someone living in your home with you may be nontaxable. If these payments were reported to you in box 1 of Form(s) W-2, include the amount on Form 1040 or 1040-SR, line 1. Also, include on line 1 any Medicaid waiver payments you received that you choose to include in earned income for purposes of claiming a credit or other tax benefit, even if you did not receive a Form W-2 reporting these payments. On line 8, subtract the nontaxable amount of the payments from any income on line 8 and enter the result. If the result is less than zero, enter it in parentheses. Enter “Notice 2014-7” and the nontaxable amount on the dotted line next to line 8. For more information about these payments, see Pub. 525."
The information in bold wants me to add my W2. However, the next sentence that is underlined seems to contradict it and saying I should choose whether to include it or not.
Then in another section for Line 1 instructions, it states:
"Any Medicaid waiver payments you received that you choose to include in earned income for purposes of claiming a credit or other tax benefit, even if you didn’t receive a Form W-2 reporting these payments. See the instructions for Schedule 1, line 8."
Again, these instructions want me to choose as well.
