CA IHSS live in provider - How to file

[manali29]

Hello, 

I am an IHSS provider in CA who lives with the recipient which makes my income non-taxable. However I have an amount in Box 1 of my W2 which is the same as in Box 16 . Do I need to pay tax on those wages or I report  that amount as a negative number under Notice 2014-7 using the other income category on the 1040? 

Thank you

[SharonD007]

Your In Home Supportive Services (IHSS) income can be exempt from a Medicaid waiver for providing care to a person that you live with. You may receive a W-2 with 0 in box 1 or you may have an amount in box 1. 

Follow the steps below:

1. Open TurboTax
2. Select Federal Taxes
3. Select Wages & Income
4. Select Work on W-2
5. Enter your W-2, at the Let's check for uncommon situations; check the box next to Medicaid waiver payments
6. If you have an amount in box 1, enter that amount.  If box 1 is 0, enter the amount that's in box 3 or 5.

To determine if you want to include this income in for your Earned Income Tax Credit, when you get to that Section, you can elect to add the income or exclude it.  Try both ways to determine which way gives you the greater EIC.

For more information, refer to the CA FTB website In-Home Supportive Services and the IRS website Certain Medicaid Waiver Payments May Be Excludable From Income.

[manali29]

Thank you so much @SharonD007 for answering my question. I appreciate your support!