Care Economy Payment

[lam29]

As a live-in provider, I received the Care Economy Payment of $500 as a check for $494.50 and a W2 that is zero on all boxes except line 14 (CA-SDI) in the amount of $5.50.   How do I go about filing my federal and state taxes?  Helpful if response could be detailed.  For example, I'm uncertain if I file $494.50 or $500, if it should be reported under "other income" or if could be added to line 1 of W2.    

[MaryK4 · Accepted solution]

This is a difficulty of care payment which is not taxable as income for federal or state taxes.  They gave you the W2 to show that they deducted the California SDI from your gross income.  You do not have to report the W2 on your tax return because Box 14 is for informational purposes only.  If you itemize deductions, you can apply the SDI as state income tax paid, but you can add the $5.50 in the Deductions & Credits section.  (You cannot efile with a W2 that has zero income in Box 1.