I stumbled across this and decided to clear things up.
In the author's situation, federal and CA taxes are due. You DON'T live with the recipient. The W2 has fed and state income reported.
When you live with the recipient things change. In this case income isn't taxable by fed or state (CA). Refer to IRS notice 2014-7.
A rulling for CA taxes in 2021 (i think) concerns the CAEITC. If you didn't report taxable income for IHSS you have the option to use that income to calculate CAEITC.
Hence why the questions look so confusing.
