If I get difficulty of care payments but some of our non taxable income is from Community outings does the setting count?

ethansmom72 — Sat, 01 Jun 2019 15:17:36 GMT

We get a stipend to care for disabled son in home and can get paid for community outings under hcbs waiver. Is this taxable?

No. TurboTax can exempt income under Notice 2014-7 per t...

Coleen3 — Sat, 01 Jun 2019 15:17:38 GMT

No.

TurboTax can exempt income under Notice 2014-7 per the IRS instructions. This Notice provides that certain payments received by an individual care provider under a state Medicaid Home and Community-Based Services Waiver (Medicaid waiver) program, are difficulty of care payments and excludable as income.

If these payments are paid to you in box 1 of form W-2 (they should not), first try to get a corrected Form W-2 from the payer. If you cannot get a corrected Form W-2, follow these steps:

Do not enter the W-2 in the Wages & Salaries topic. Instead enter it as Other Reportable Income under the Miscellaneous Income section. Take the following steps:

Sign in to TurboTax Online, click Continue your return, then pick up where I left off (if you are using TurboTax CD/ Download, then just open your return on your computer);

Click on Federal Taxes at the top of the screen;

At the bottom of Your Income box pick the option in blue to help me add other income, then jump to full list;

Scroll down the page to the last section titled: Less common Income and click show more;

Select start or update next to the last topic titled Miscellaneous Income, 1099-A, 1099-C;

Scroll down to the last option titled Other reportable income and select start or edit;

When it asks, "Any other reportable income?" say yes then you will make two entries:

Your first entry description would be W-2 EIN # (enter EIN number from W-2) Box 1 Medicaid W-2 EIN # (enter EIN number from W-2) Box 1 Medicaid

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.

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

topic If I get difficulty of care payments but some of our non taxable income is from Community outings does the setting count? in Retirement tax questions

If I get difficulty of care payments but some of our non taxable income is from Community outings does the setting count?

No. TurboTax can exempt income under Notice 2014-7 per t...