Generally, you can enter '0' in box 1 and you are allowed to efile. However, if your income does not exceed the maximum Social Security earnings of $142,800, you do not have to enter the W-2 for only boxes 3, 4, 5 and 6.
Per IRS Notice 2014-7, payments from a state Medicaid Home and Community-Based Services program are considered "difficulty of care" payments and are specifically excluded from gross income for income tax purposes. Please see this IRS article for more information.
Do you have qualifying children as dependents on your tax return? This income may count towards the Earned Income Tax Credit.
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