It's best for your employer to supply a letter with the correct information so you'll know the exact dollar amount. Then you can state you change your W2 according to IRS TR-32-153-91. I would attach that with your return. TR 32-153-91 is an agreement with the IRS that excludable compensation is the same as workmen's comp.
In TurboTax 2016, enter your income as received either on a W-2 or 1099-MISC, then offset it by taking these steps:
1. Federal Taxes tab (left of screen)
2. Then Wages & Income
3. Pick, “I’ll choose what I work on” Button
4. Scroll down to Less Common Income
5. Pick start next to Misc Income, 1099-A, 1099-C
6. On the next screen choose other reportable income (at the bottom)
7. Say yes that you have other taxable income.
8. For description enter "per TR 32-153-91" Enter the amount of the income with a minus sign (-) in front of it.
This effectively removes your income from the tax calculations and will appear on line 21 of your Federal Form 1040 as a negative dollar amount.
