In entering all W2 information (wages box 1 and box 12a code II amounts) into the 2024 Turbotax program, I am seeing a positive dollar amount displaying in row 1d in the income section. This amount should represent the exempt amount based on notice 2014-7. The amount listed on row 1d (medicaid waiver amount) is then included in the total income and AGI amounts which are increasing the tax burden. It seems that it is inappropriate to include 1d as taxable income or it should be offset by the amount listed in schedule 1, orw 8s. In looking at schedule 1, there is a negative amount listed on row 8s which is then offset by the same amount listed as a positive amount on row 8z (net zero amount on schedule 1).
Why does the excludable income from the medicaid waiver program get included in the total and AGI amounts?
