Hello. Live in provider. Exempt from ihss income being added to agi. Have question about the medical payments been entered on California return.
I know on feds you have to enter all or none of medical payment
However on CA tax website it's saying "
Some or all of this income may be included or excluded in your federal adjusted gross income, which you report on your California return."
https://www.ftb.ca.gov/file/personal/income-types/in-home-support-services.html
So can I enter some of the payments or must it be all or nothing same as feds. When I get to CA state taxes it asking me to confirm how much I want to reduce the amount. I can enter a value From 0 to full amount of medical payments.
If all of your IHSS income is excluded on your Federal return because it qualifies as "difficulty of care" payments (live-in provider) as explained in IRS Notice 2014-7, then you don't need to adjust your California return because you already reduced the amount on the Federal return.
See this help article, which was recently updated, for more information.
I kinda of see what your saying. I really don't need to exclude any on federal as I don't qualify for much of anything as there is no other income. If I can exclude some of the payments and not the full amount on CA return I can qualify for CA EITC. However if I add all of the exemption I go over the limits set. Hence why I'm asking do I have to add all payments to CA. As the website was vauge if it's all or some for CA returns.
You can exclude the full amount of difficulty of care payments in California, as well, to claim the EITC. You will have questions about the payments when you are completing the California portion of your return.
Yes, you can choose to exclude all or none of the IHSS income for EITC purposes on the California return, but not part.
Please see this California Department of Social Services webpage:
"If you received income from the In-Home Support Services (IHSS) program for providing care to someone you live with, you have the option to include or exclude all or none of that income as earned income on your tax return. This may allow you to qualify for CalEITC and other tax credits".
Also: "you may choose to include all, but not part, of these payments in earned income for determining the EIC or the ACTC".