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Difficulty of Care Payments

I receive income through the state of Oregon for taking care of my mother. These are not called medicare waiver payments but are considered employment income. She lives in my home so I qualify for this exception but my issue is, I receive a w2 at the beginning of every year and my income is reported on lines 1, 3, and 5. Federal taxes are on line 2 and state taxes are on line 17. Where is the actual income amount located on my w2 that needs to be excluded per this difficulty of care federal exclusion? I have read so many posts and they all reported different things. I am beyond confused. I have talked with the IRS and they had no information about this exclusion. Any help with this would be greatly appreciated!

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1 Best answer

Accepted Solutions
CatinaT1
Employee Tax Expert

Difficulty of Care Payments

That is okay. Enter your W2 just like it is. You will get to the step on the Uncommon situations page where you will check that you have Difficulty of Care Payments and TurboTax will ask you how much of the amount in box 1 is for Difficulty of Care Payments. You will indicate the entire amount and that will make it non-taxable.

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4 Replies
TomK2023
Employee Tax Expert

Difficulty of Care Payments

Please read this TurboTax FAQ about in-home supportive services (IHSS): How do I enter my tax-exempt Medicaid waiver payments from IHHS in TurboTax?

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Difficulty of Care Payments

My w2 box 1 has income in it. It does not have 0 income. What do I do then? Do I claim the whole amount of income that I made for 2023? That doesn't seem right.

CatinaT1
Employee Tax Expert

Difficulty of Care Payments

That is okay. Enter your W2 just like it is. You will get to the step on the Uncommon situations page where you will check that you have Difficulty of Care Payments and TurboTax will ask you how much of the amount in box 1 is for Difficulty of Care Payments. You will indicate the entire amount and that will make it non-taxable.

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**Mark the post that answers your question by clicking on "Mark as Best Answer"

Difficulty of Care Payments

Okay, Thank you very much for explaining that to me. I have been trying to get this answer for days now. Thank you so, so much!!!!

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