I received a 1099 MISC from the state. I receive a monthly stipend (foster care) for my brother, whom I have guardianship of. I was told that it is not supposed to be taxed. I am confused: why is it taxing me as if I were self-employed when I enter the information? When I enter it, it reduces my refund by over 3k, and I only received 4977.63 from the state. What am I doing wrong?
This sounds like a Difficulty of Care or Medicaid Waiver payment, which is not taxable income. See Certain Medicaid waiver payments may be excludable from income.
You will want to go back to your 1099-MISC entry and look for the follow up question to indicate that it is a Medicaid Waiver payment and TurboTax will recalculate so you do not pay tax on it. See also How do I enter my tax-exempt Medicaid waiver payments from ...
Ok, thank you for your response. I just saw that option, but I wasn't sure if that was the correct response since he isn't disabled. I have him because our mom passed. I did notice that when I selected that option, it didn't reduce my refund. I am just confused about the stipulations of the DOC and Medicaid waivers.
The stipulations vary depending on the state you are in, but Medicaid waivers can be a supplement to foster care payments. I am sorry for the loss of your mom.