1099-NEC

[bobtown1]

I am a disabled person in a Medicaid program.  My budget allows me to bring in a housekeeper twice per month.  I pay the housekeeper out of pocket, then the Managed Care Organization (MCO) running the program reimburses me when I send in the documentation.  The MCO just sent me a 1099-NEC for the amount of those reimbursements.  When I enter it, the Turbotax wants me to open a Schedule C, but clearly this is not income.  How should I enter this 1099-NEC?

[bobtown1]

Where do these answers go?

[MaryK4 · Accepted solution]

After you enter the 1099-MISC, you will want to indicate that "This income is a Medicaid waiver payment that qualifies as a difficulty of care payment."  This will not include it as taxable income.  NOTE: TurboTax indicates that the income may be used to qualify for the Earned Income Tax Credit- if it does, make sure you DO NOT use this as income for the Earned Income Tax Credit because this is a reimbursement, not payment for services.