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1099-NEC

Forum|Forum|3 years ago
February 12, 2023
2 replies
29 views

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?

Best answer by MaryK4

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.

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MaryK4Answer

Level 15

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.

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