Married filing jointly. My wife is the one who receives the IHSS income which is not counted toward federal income. Her employer correctly shows zero federal wages and zero federal tax withheld. However, Colorado still requires the income to have state income tax withheld and thus she had it withheld. But the catch 22 is that TurboTax won't let me e-file the federal return if a W2 shows zero income. But if I remove the W2, the State return doesn't correctly show the correct refund amount because it doesn't see the proper state tax that was withheld since TurboTax won't allow that W2 to be entered and still be able to file the federal portion.
