A recent court case now makes maedicare waiver payments eligible for EIC, even though they are not taxable (https://www.ustaxcourt.gov/UstcInOp/OpinionViewer.aspx?ID=11863).
Do not eter the income as Misc/Other Income, as previously advised. Instead enter your W-2 as a regualar W-2.
Then make a separate negative entry as follows:
- In Income go to the Less Common Income section and select Start next toMiscellaneous Income, 1099-A, 1099-C.
- On the next screen, select Start next to Other Reportable Income and answer Yes on the next screen. Enter the description IRS Notice 2014-7 excludable income and enter the W-2 box 1 amount as a negative (-) number. This places an offset on line 8 of Schedule 1, making the income not taxed, but still eligible for EIC.
A requirement, for the income exclusion, is that you live with the care recipient .
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Q. Can that income be used to calculate an SSDI overpayment?
A. I would think not, since it is not taxable. But I don't know that for a fact. You may have to address that question to SSA.
