For the 2024 tax year, most of the information in this thread may be incorrect or misleading. The IRS added an option in 12a to report and classify the waiver income. The code is "II". The state of California should have sent W2s to live in providers with $0 in box 1 and the waiver wagers in 12a. The code for box 12a should be "II". Don't fill out the uncommon situations section in Turbotax. Turbotax will see the 12a income and ask you if you want to use it for the EITC calculation. If you want to E-File your return you'll have to enter $1 in box 1.
I've already filed my taxes this year and received my state refund. So the new W2s from the state work as expected.
Good Luck!
