How to fill out Difficulty of Care for Medicaid after I file

[Laura_CPA]

Dear Firedude545,

I hope you are having a good day! Could you please rephrase your question? You want to know how to fill out Medicaid form?

Look forward to hearing from you soon.

[firedude545]

How do I fill out Form 843 to reclaim taxes that were withheld for me being tax exempt providing services for my special needs son with a state ran Medicaid Program?

[Laura_CPA]

Thank you for the clarification. Please review the actual Form 843 fill out as much as you can and if you need additional help with it, please give us a call at 1-800-446-8848. Also, refer to the instructions to Form 843

[firedude545]

I guess my q

[firedude545]

I guess my question is, is this form supported by Turbo Tax and will I be able to fill it out at tax time.  I could not find this form during my completion of my 2021 taxes.  I have received conflicting information about this?

[firedude545]

Is the IRS form 843 used for taxes that were held out my the employer improperly since I am a tax exempt employee working  for my wife?

[Laura_CPA]

Unfortunately, TurboTax doesn't support Form 843, but you could manually fill it out and send it along with your tax return (via regular mail). 

[Laura_CPA]

Maybe we need to ask you the following: did you receive a W-2 for which you were exempt from? Are you a caregiver to your spouse? 

[firedude545]

Yes I did get a W2 from Palco, the third party parent company for my special needs son Riley. He is on a Medicaid program, Mi Via through the state of NM.  My wife is the EOR (Employer of Record) for the waiver, so for tax purposes I work for my spouse, but the W2 comes from the third-party company.  I looked in the Turbo Tax community for instructions on Difficulty of Care, but it seemed confusing.  So for last year, I would have to do a 1040X amended return? or use IRS form 843?

[Laura_CPA]

Thank you for that piece of information! I know exactly what you need to do, let me look for the Revenue Ruling and I will get back to you shortly. 

[Laura_CPA]

Does your son live with you? 

[firedude545]

Yes he does. He is a 24 y/o Autistic kiddo.  

[firedude545]

The third party company PALCO is not very easy to work with.  Rather than correct my W2 last year, they emailed me to fill out form 843 with the IRS. but I do not think that is a form I can use with Turbo Tax?

[Laura_CPA]

Great! Thank you, we have the information for you. Since you live together under the same roof (excuse my redundancy), your wages will be excluded from taxation. You'll have to amend your tax return, leave it as is, just when you amend it, enter the wages under other income and enter it as a -(negative) amount so that it is reduced from the wages already included.

You'll use the following verbiage under the other income -(negative) amount  "wages excluded per IRS notice 2017-7", you do not have to file Form 843 for federal purposes, just use the above information. You might want to contact the third party to see if they can exempt you from taxation, so that you don't continue to receive a W-2. 

Hope this helps and if you need help with amending your tax return, please feel free to call us at 1-800-446-8848. You had me digging for the treasure LOL glad we got to the bottom of it.