I received a letter from IHSS saying that providers who live with the recipient of those services are not considered part of gross income for purpose of federal income tax. If I submit the Live-In-Self-Certification Form ( SOC 2298 ), will I have to deal with the taxes at the end of the year like a deferred tax payment or is it totally excluded from filing the income tax? Is it best to submit the form or just file the income tax like we normally do every year?
I just had a client bring one of these in a few weeks ago.....from reading it, I'm guessing once you self certify they will no longer send you the W2 to report the wages and make the adjustment on the tax return.
Is it for California? Depending on if you get a W2 there are different ways to enter it. And have you been excluding the income from your tax returns? I just amended 3 years of my sister's return to take off the IHSS income that she got W2 for.
In my case, I get IHSS in California for my child who lives with me (my pay-stub shows zero deductions in all categories) IHSS is not my only income, and I qualify for the child-tax credit based on other sources of income. I recently received notice from DSS that my IHSS wages are not considered part of gross income for both Federal and State Tax Purposes. As a result, I filled out the SOC Form 2298. I just completed my taxes without even waiting to see if I get a W2 from IHSS (I don't expect I will) . However, if I do get a W2 from IHSS I'll just ignore it until I get a notice from the IRS asking about it. At that point, that letter from DSS and IRS Notice 2014-7 is all the documentation I will need to show the IRS that my taxes were filed correctly.
I don't quite understand what happens to the tax I paid then? This didn't come into effect until 12/2016, so fed and state has been deducted throughout the year. So I submit my form now 1/2017 and I don't include ihss income for my 2016 tax filing -ok but does that mean I don't get my tax from that neither?! I select 1 on my W4 withholdings expecting to get it back... What do I do now??
I don't quite understand what happens to the tax I paid then? This didn't come into effect until 12/2016, so fed and state has been deducted throughout the year. So I submit my form now 1/2017 and I don't include ihss income for my 2016 tax filing -ok but does that mean I don't get my tax from that neither?! I select 1 on my W4 withholdings expecting to get it back... What do I do now??
I don't quite understand what happens to the tax I paid then? This didn't come into effect until 12/2016, so fed and state has been deducted throughout the year. So I submit my form now 1/2017 and I don't include ihss income for my 2016 tax filing -ok but does that mean I don't get my tax from that neither?! I select 1 on my W4 withholdings expecting to get it back... What do I do now??
**Update 1/25/17......I received a W2 for 2016 even though I filled out a SOC form 2298 in December....since I assumed I would not get one (wrong) I completed my taxes last week and they were already approved (both Federal and State). At this point, I will just leave my taxes as they are and will wait to see if I hear anything from the IRS why I left out the IHSS W2........but I am not re-doing my taxes at this point.
You filled it out December? Dec 2015 or 2016? Was the W2 for the whole year? Or just until they processed the 2298?
The self certification is for 2017 going forward...so you will still get the 2016 W2. They failed to include that information on any of the self certification paperwork.
VolvoGirl:I filled it out in December 2016......Lisa995: Thanks for the info.....hopefully leaving out the W2 from my taxes won't be an issue with the IRS : )
You may get a computer "mismatch" letter, Notice CP2000 in the next year or 2....just respond with the explanation that you qualify for the income to be non taxable and cite Notice 2014-7 and it should get cleared up fairly easily.
I filled out the SOC 2298 in Nov 2016 and just received my Jan pay stub. It still shows that they are withholding Federal and state taxes. Is this right?
banannamouse: You may need to modify your W4 so that you don't have any income with-held.
As the others mentioned, if you fill out the certification, your W-2 (if any) will be correct, and you won't need to fiddle around on the tax return trying to make it right. So it will be easier if you fill out the certification.
But if you do get a W2 you need to show it on your tax return and enter an offsetting amount to zero it out. Or the IRS will think you didn't report the W2.
I'm confused, because I was told by a social worker that if you fill out the form, you can't count that money on your taxes. So if it's your on source of income, you don't have to fill taxes. But this sounds incorrect to me, and I can't seem to get a straight answer from CDSS.
Youre understanding correctly. Once you fill out the self certification, you will no longer receive a W2 to claim that income on your taxes.
This is how people were removing the income from their tax returns before the self certification started.
<a rel="nofollow" target="_blank" href="https://www.irs.gov/individuals/certain-medicaid-waiver-payments-may-be-excludable-from-income">https://www.irs.gov/individuals/certain-medicaid-waiver-payments-may-be-excludable-from-income</a>
I don't quite understand what happens to the tax I paid then? This didn't come into effect until 12/2016, so fed and state has been deducted throughout the year. So I submit my form now 1/2017 and I don't include ihss income for my 2016 tax filing -ok but does that mean I don't get my tax from that neither?! I select 1 on my W4 withholdings expecting to get it back... What do I do now??
If you did not have file the certification for the entire year, you will still receive a W-2 that will include your withheld income tax. You should be able to tell TurboTax it is not taxable, but you will still receive credit for the income tax that was withheld, and it will be added to your refund.
Can i still claim my 3 year old daughter tax return ? With the ihss even if I live with my recipient for this last time?
I submitted SOC Live-In- Self Certification Form 2298 back in November 2016. I received a W2 last friday that included my withheld taxes for the entire year of 2016, so on what line do I tell TurboTax to excluded my IHSS income?
Enter the W2 as normal wages on line 7.
Then make an entry on 1040 line 21 Other Income to offiset it by going to
Federal Taxes
Wages and Income
Choose Jump to Full List -or I'll choose what I work on
Scroll way down to the end - Less Common Income
Click start or update next to the last one "miscellaneous income"
Then the last one for Other Reportable Income
For description enter “Notice 2014-7” . Enter the amount with a minus sign (-) in front of it.