This is done in 2 parts
Part 1: Enter your caregiver income using the following steps (do not enter the Form 1099-NEC).
- Open your TurboTax return > Under Wages and Income scroll to Miscellaneous Income
- Select Other income not already reported on a Form W-2 or Form 1099 > Start or Revisit
- Select Yes under Did you receive any other wages > Continue
- Continue to screen Certain nontaxable Medicaid waiver payments not reported on Form W-2 or 1099 >Enter the amounts you received in Medicaid waiver payments field as a positive number.
- This would take into account the income for reporting purpose.
This will eliminate adding self-employment tax which does not apply. Keep the 1099-NEC with your tax documents.
Part 2: Follow these steps to remove the income from your tax return.
- Scroll down the page to the last section titled: Less common Income and click show more;
- Select start or update next to the last topic titled Miscellaneous Income, 1099-A, 1099-C;
- Scroll down to the last option titled Other reportable income and select start or edit;
- When it asks, "Any other reportable income?" say yes then you will make one entry
- Enter this description: IRS Notice 2014-7 excludable income and enter the W-2 Box 1 amount as a Negative (-) number
When you return to the Wages & Income page, scroll to see the negative income beside Miscellaneous Income, 1099-A, 1099-C; This will remove the income on your return for the IHSS or other payments received by an individual care provider under a state Medicaid Home and Community-Based Services Waiver program.
Thus by doing part 1, your AGI still continue to report your income to IRS and part 2 eliminates the income you received thus your taxable income does not increase because of this receipt.
