Do I have to file my IHSS W-2?

[LeonardS]

To report your IHSS  income to allow you to qualify for the Earned Income Tax Credit follow these steps:

1. Scroll down to "Less Common Income".
2. click on Show More.
3. click on Start or Revisit next to Miscellaneous Income, 1099-A, 1099-C.
4. click on Start or Revisit next to Other reportable income, select Yes
5. enter "In-Home Support Services Payments, in the description box and then enter the amount (the total for the year from your paystubs)
6. click Continue.

To enter the offset for the payments (whether you chose to report as earned income or not):

1. Click on Wages and Income at the top of the screen.
2. scroll down to "Less Common Income"; click on Show More.
3. click on Start or Revisit next to Miscellaneous Income , 1099-A, 1099-C..
4. click on Start or Revisit next to Other Reportable Income.
5. select "Yes" or "Add Another Income Item".
6. in the "Description" section, enter "IRS Notice 2014-7 excludable income" and in the "Amount" section, enter the total for the year from your pay stubs as a negative (-) number.

A recent court case, ruled that IHSS payments and Medicaid Waiver Payments are considered "earned income" for purposes of calculating the earned income tax credit and other credits. Even though the income is not taxable for income tax purposes, a taxpayer can choose to show the payments as earned income to claim a credit.

@Nayj1

[DIANA2022]

Do I have to do this on the State tax? There is a section called "Other adjstments to wages" Should I input the negative amount here?

[MarilynG]

No, you won't need to exempt your IHSS income on your State taxes if you did so on your Federal return.

The State normally starts their calculations with the bottom line from your Federal return, so the income has already been exempted.

Look for a 'Learn more' link on that page that will tell you the kinds of 'adjustments' they refer to.

@DIANA2022