topic If my income is exempt from paying taxes. It doesn't count as income...meaning no SS, no FICA, taken out. Have 2 dependents, 1 will qualify for EITC. Do i still file? in Get your taxes done using TurboTax

If my income is exempt from paying taxes. It doesn't count as income...meaning no SS, no FICA, taken out. Have 2 dependents, 1 will qualify for EITC. Do i still file?

C8sMomma — Thu, 06 Jun 2019 15:57:40 GMT

What kind of income do you have? No EARNED income = no Ea...

Rainman12 — Thu, 06 Jun 2019 15:57:42 GMT

What kind of income do you have? No EARNED income = no Earned Income Credit. Earned income is taxable ...

Did you get a form for it like a W2 or 1099Misc? Why is...

VolvoGirl — Thu, 06 Jun 2019 15:57:43 GMT

Did you get a form for it like a W2 or 1099Misc? Why is it exempt?

I have a W2. But the federal government passed a law that...

C8sMomma — Thu, 06 Jun 2019 15:57:45 GMT

I have a W2. But the federal government passed a law that made my income not taxable ( this may not be the correct wording) My income is not considered and despite wanting withholdings....I was denied. Not even Medicare is withheld!! I had always paid taxes and had SS, Medicare, Disability etc withheld via my check but in 2017 I no longer had the option to have these things witheld. I am a Home Health Care worker that is caring for a family member.

Awww, IHSS no you don't have to file a return if that i...

VolvoGirl — Thu, 06 Jun 2019 15:57:46 GMT

Awww,  IHSS  no you don't have to file a return if that is your only income.  No you should not qualify for the  EIC for that.

There are a couple ways to enter a W2 for IHSS wages.

1. Enter the W2 as normal wages on line 7.

Then make an entry on 1040 line 21 Other Income to offiset it by going to
Federal Taxes
Wages and Income
Scroll way down to the end  - Less Common Income
Click start or update next to the last one "miscellaneous income"
Then the last one for Other Reportable Income
For description enter “Notice 2014-7” . Enter the amount with a minus sign (-) in front of it.

2.  Or when you enter the W2 it gives you the EIC credit for it (which would be wrong) see this FAQ
https://ttlc.intuit.com/questions/2635384-qualified-medicaid-waiver-payments-on-a-w-2-show-as-earned-income-for-eic

So you either completely exclude the W2 from your return or enter it under Miscellaneous Income.   To enter it as Misc Income use the same steps as above and you will make 2 entries.

Your first entry description would be W-2 EIN # (enter EIN number from W-2) Box 1 Medicaid Waiver Payments, and enter the Box 1 amount as a positive number.

Next you click "Add Another Miscellaneous Income Item," and enter this description: IRS Notice 2014-7 excludable income and enter the W-2 Box 1 amount as a Negative (-) number. This both shows and explains removing the W-2 income, placing a zero on Line 21 of your Form 1040.

Then if your W-2 has federal or state taxes withheld, you can enter these amounts in the Deductions & Credits section under Estimates and Other Taxes Paid, or Other Income Taxes Paid as Withholding not already entered on W-2.

Re: If my income is exempt from paying taxes. It doesn't count as income...meaning no SS, no FICA, taken out. Have 2 dependents, 1 will qualify for EITC. Do i still file?

chattyme2 — Sat, 11 Apr 2020 21:49:00 GMT

Did you ever receive an answer that really addressed the issue? I am in the same boat and WANT FICA and Medicare taken out.