Notice 2014-7 made Difficulty of Care payments eligible to be treated as Earned Income for certain credits.
Difficulty of Care payments are not normally reported on a W2.
If you were able to enter the W2 into the TurboTax program, here is how to make it tax exempt.
(NOTE- AT THIS POINT, YOU MAY NOT OWE ANY TAX ON THE INCOME AND YOU MAY ALREADY HAVE THE EIC CREDIT INCLUDED IN YOUR REFUND, THEREFORE THE NEXT STEPS MAY OR MAY NOT CHANGE THE FEDERAL REFUND METER ON TOP OF THE TURBOTAX SCREEN)
Go back to the Wages & Income section
Scroll down to the VERY LAST option "Less Common Income" and click Show more
On this new drop-down list scroll down to the VERY LAST option "Miscellaneous Income" and click START
Now scroll down to the VERY LAST option "Other reportable income" and click Start
Select YES on the "Any Other Taxable Income?" screen
Type "Notice 2014-7" and the same amount you entered before but as a NEGATIVE (put - in front of the number)
This NEGATIVE number should show on your 1040 line 8
Go through the return and answer any questions regarding the EIC and any other credits you may be eligible for if necessary.
TO CHECK IN TURBOTAX ONLINE:
Click "Tax Tools" on the LEFT SIDE BAR then click "Tools" that open below
Click "View Tax Summary" on the screen
Click "Preview my 1040" which now appears on the LEFT SIDE BAR
Scroll through the 1040.
The amount of income should be on line 1
The adjustment (negative) should be on line 8
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