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If these payments are paid to you in box 1 of form W-2 (they should not), contact the agency and try to get a corrected Form W-2. If you cannot get a corrected Form W-2, follow the steps below.

• Note: Do not enter the W-2 in the Wages & Salaries topic. Instead enter it as Other Reportable Income under the Miscellaneous Income section.

1. Sign in to TurboTax Online, click Continue your return, then pick up where I left
2. Select Federal in the left-hand column, then Wages and Income on top of the screen
3. Scroll down to All Income, locate the Less Common Income section
4. Click Show more and click Start next to Miscellaneous Income at the bottom
5. On the next page, click Start next to Other Reportable Income.

Per IRS:  Your Medicaid Waiver Payments are included in income.

• Per When the provider works in the care recipient’s home, but the provider has a separate home where the provider resides and regularly performs the routines of the provider’s private life, such as shared meals and holidays with family, the provider does not provide care for the care recipient in the provider’s home, and the provider may not exclude the Medicaid waiver payments from gross income.

If your W-2 has federal or state taxes withheld, you can enter these amounts in the Deductions & Credits section under Other Income Taxes as Withholding not already entered on W-2.

For more information, refer to IRS Notice 2014–7, 20144 I.R.B. 445 and the IRS FAQs.