After entering your W-2, did you exclude your Medicaid Waiver Payments in the 'Miscellaneous Income' section? If so, this will back it out on Schedule 1 under Line 8s as Nontaxable amount of Medicaid waiver payments included on Form 1040, line 1a or 1d.
If not, here's the steps to reporting Medicaid Waiver Payments.
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