How do I enter my tax-exempt Medicaid waiver payments with a W2 in TurboTax and be able to e-file

My situation is that I don't qualify for the Earned Income Credit and my taxes due increases if I remove the W2 received for the Medicare waiver, therefore I prefer to reduce my tax by entering the W2, but I'm unable to e-file? Is there any other way to include the W2 and be able to e-file?

Thanks.

3268

Expert Alumni

Feb 13, 2025 5:29:07 AM

Yes, you can do this. Ensure you are entering your W2 according to your situation given in these instructions: How do I enter my tax-exempt Medicaid waiver payments from IHSS in TurboTax?

TurboTax can exempt income under Notice 2014-7 per the IRS instructions for Medicaid Waiver payments from IHHS. This Notice provides that certain payments received by an individual care provider under a state Medicaid Home and Community-Based Services Waiver (Medicaid waiver) program are difficulty of care payments and excludable as income. Additionally, you can choose to use this income to calculate Earned Income Credit. Regardless, the income will remain non-taxable.

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How do I enter my tax-exempt Medicaid waiver payments with a W2 in TurboTax and be able to e-file

My situation is that I don't qualify for the Earned Income Credit and my taxes due increases if I remove the W2 received for the Medicare waiver, therefore I prefer to reduce my tax by entering the W2, but I'm unable to e-file? Is there any other way to include the W2 and be able to e-file?Thanks.