If your incentive income is reported to you on a W-2, it’s best to request a corrected W-2 from your employer. W-2 earnings are subject to certain payroll taxes that can’t be refunded on a normal income tax return.
If you’re unable to get a corrected W-2, you can claim the exclusion by reporting the eligible amount (up to $600) as “other income”. Enter the income as a negative amount with the description “IRC 139B exclusion for volunteer responders”. To navigate to this area in TurboTax:
- Select Search from the menu
- Type other reportable income and hit Enter
- Select Jump to other reportable income
- On the Other Wages Received screen, select Yes, then Continue
- Proceed until the Any Other Earned Income screen. Select Yes, then Continue
- On the Enter Source of Other Earned Income screen, select Other, then Continue
- Enter the negative amount and description, then select Done
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