Difficulty Of Care

[nicoleann]

I received income under the difficulty of care for my son, who is an adult. I have been doing this for over two years now, and have never had a problem. This year it seems like this money is being counted against me, and I do not qualify for the maximum EIC. The IRS has adjusted my return. Is it possible that I did something wrong because I thought we were able to exclude this income. I have a normal job where I get a W-2 and I use that income to qualify for the EIC. I think adding in the difficulty of care income is putting me over the limit. Should I amend my return? Am I doing something wrong?

[LeticiaF1]

You are correct, certain Medicaid waivers from in-home supportive services are tax exempt.  If you have not filed your return yet, you can still change how you entered the income on your return.  

If you already filed, then you would have to file an amended return. You must first wait until the initial return is completely processed.

• You will have to use the same TurboTax account that you used for the original tax return.
• Once you begin your amendment, you'll see your original return. 
  • The refund calculator will start new at $0 and only reflect the changes in the refund or tax due
  • Only make changes to the areas of your return that need amending.
• You have three years from the date you filed your return or two years after you paid the tax due (whichever is later) to file an amendment

Once you are ready to correct your entries see the following TurboTax articles for more details on entering your waiver payments and amending your return if necessary.  

How do I enter my tax-exempt Medicaid waiver payments from IHSS in TurboTax?

How to File an Amended Tax Return with the IRS