Utah New Choices Waiver Medicaid taxes

[nadude]

My mother is on the New Choices Waiver in Utah. Since she gets her full gross amount as required by the NCW and doesn't get taxes taken out of it and the majority of those funds is used to spend down monthly, I am told she shouldn't have to pay taxes, but I don't know how to get it to zero. She is in a long-term care facility and the state takes a certain amount, and she pays the facility a certain amount, which is almost her entire monthly annuity and social security. The state says she should not owe federal or state taxes, but no one wants to show me how it's done. 

[MaryK4]

You need to find her income documents- she should have 1099s or other statements.  The Medicaid waiver program shows that she is qualified so her income may under the filing requirement.  You may be able to look for her old tax returns to get some idea of her income.  If you have her power of attorney or if she is able, you can request her Wage and Income Transcripts from the IRS.  See Topic no. 159, How to get a wage and income transcript or copy of Form W-2.

[nadude]

I have the 1099-R and the SSA-1099, but since she's on the New Choices Waiver in Utah, she shouldn't owe any taxes, that's the part I'm having difficulty figuring out. I have had tax help that, but they don't seem to understand that this Medicaid should equal to zero. Even the state NCW people say she shouldn't owe taxes, but no one will actually show me how to do it.

Thank you.

[MarilynG1]

After entering her 1099-R and SSA-1099 in TurboTax, scroll all the way down to Miscellaneous Income, 1099-A, 1099-C.  On the next page, scroll all the way down to Other Reportable Income.  Say yes to 'other taxable income' and on the next page, for Description enter 'Utah Medicaid Waiver Adjustment' and the Amount that she paid out to her long-term care facility as a negative number.

Since they take most of her funds, her return may show $0 tax due, since the Standard Deduction will be subtracted from any amount of income remaining.  Keep program qualifying info for the Medicaid Waiver as documentation, along with a statement of her expenses from the facility with her tax documents.   

If that applies, she would not be required to file a return at all, but you could file just for reporting.  Here's info on Filing Requirements.  Utah follows the same as Federal.

@nadude