State tax filing

If  your W-2 for IHSS payments does not have $0 in box 1, then after you enter the W-2 you will come to a screen that says Lets Check  for uncommon situations.  There you will check the box that says "Nontaxable Medicaid Waiver payments that qualify as difficulty of care payments"

Then you will answer the questions of how much of that was for difficulty of care and if you received any payments not for difficulty of care on that W-2. 

This will cause the income you received to be deducted on Schedule 1 line 8s as an adjustment to your income.  

Only the payments made that are considered Difficulty of Care Payments qualify to be removed from your income.