How do I file the taxes if I'm an IHSS provider?

[PangV01]

My W2 boxes 1 and 16 have wages and I live with the person I care for, which is my son.  Can I still file and claim the child dependent credit or not? 

[ThomasM125]

I believe you are referring to the child tax credit or the dependent credit. If your child qualifies as your dependent then you may be entitled to the child tax credit or dependent credit. You just need to enter him in TurboTax as your dependent and answer the questions to see if he qualifies.

[Btomsich7891]

Is claiming a dependant be your mother? I take care& live with my mother with dementia and had received a w-2 and was wondering if I could still file and claim her as a dependent. I had federal taxes withheld all year even though I was told I was exempt from being taxed because I live with her. If I file will I get anything back?  Box 10 for dependant care benefits is 0.00 so does that mean I can't claim her as a dependent? Thanks for your time!

[LeonardS]

If you meet these requirements you can claim your mother as a dependant.

• Do they live with you? Your relative must live at your residence all year or be on the list of “relatives who do not live with you” in Publication 501. About 30 types of relatives are on this list.
• Do they make less than $4,200 in 2019? Your relative cannot have a gross income of more than $4,200 in 2019 and be claimed by you as a dependent.
• Do you financially support them? You must provide more than half of your relative’s total support each year.
• Are you the only person claiming them? This means you can’t claim the same person twice, once as a qualifying relative and again as a qualifying child. It also means you can’t claim a relative—say a cousin—if someone else, such as his parents, also claim him.

[Angie351]

You dont

[Analisa86]

hi, so if i am a live in IHSS provider and have a different job, i do not have to file for the IHSS income? Just my other job?

[Angelitak]

I took care of my client for 3 months and the last month I took care of her she lived in my home how would I file and do I qualify for any kind of tax breaks

[Nicoletteeee]

Hi all, I too am very confused for my IHSS W-2s. I’ve been a provider for about 6 years now and as of 3 years ago I started owing taxes. I asked a tax person and they said the IHSS wasn’t taking enough out causing me to owe so I went to the office to adjust my tax form but I’m scared it’s gonna happen again. I can’t afford another $1200 debt after 3 consecutive years. What am I doing wrong and can I do anything to relieve any portion of it?

[DanielV01]

@Angelitak

I took care of my client for 3 months and the last month I took care of her she lived in my home how would I file and do I qualify for any kind of tax break

Double-check with IHSS as to how your income is classified.  Earlier in this thread you will see I have posted a link to CA's website that discusses this further.  However, if box 1 on your W2 is blank, you do not need to include the W2 on your tax return if you don't wish.

@Nicoletteeee

Hi all, I too am very confused for my IHSS W-2s. I’ve been a provider for about 6 years now and as of 3 years ago I started owing taxes. I asked a tax person and they said the IHSS wasn’t taking enough out causing me to owe so I went to the office to adjust my tax form but I’m scared it’s gonna happen again. I can’t afford another $1200 debt after 3 consecutive years. What am I doing wrong and can I do anything to relieve any portion of it

That depends.  As stated above, if box 1 of your W2 reports $0, you probably did not have to include the W2 on your return.  Remember, though, that the provision to exclude the Waiver Payments from income is when you live with the taxpayer.  If you do not live with the taxpayer, the income is taxable just like any other wages are taxable, and you would need to fill out a revised Form W-4 (and perhaps the California equivalent) to have the correct amount of tax withheld.

However, if the income is excludable from tax, please see the link I post below on how you can remove the IHSS income from your tax return as part of an Amended Tax Return.  (You will need to follow instruction in TurboTax to file an amendment for prior years dating back to 2017).

For both @Angelitak and @Nicoletteeee:  Follow the instruction in the following link to be able to have the Medicaid Waiver payments subtracted out of earned income if you qualify to do so:  Solved: How and where to Post claim "IRS Notice 2014-7 ...

[lrsdranger82nd]

I'm a live-in provider for IHSS and I do not get any W2, so my question under the new law passed by congress, and because your software doesn't seem to be updated yet, how are we filling for 2020-2019-2018 since we can go back 4 years? I've called and spoken to your live agent and he was online with me but no questions were answered by any expert on the matter. No W2 how are we supposed to claim the child credits, the stimulus which I didn't get if we don't have any info to put on your software for W2 or employment info, I'm not self-employed so 1099 does not apply to me. TY for the help.

[DaveF1006]

Please read this Turbo Tax link for further instructions. In this link it states that you can declare your IHSS income by doing this in your 2020 tax year. You can also file 2018 and 2019 tax returns by the same method to claim your child tax credit and earned income credits. 

1. Log into TurboTax and click on any topic to continue
2. Click on Federal from the menu on the left-hand side and then click on Wages & Income at the top
3. If you choose to report your payments to receive a credit: Click Edit/Add next to Job (W-2) and then click on Add a W-2.
4. If you actually received a W-2 for your IHSS Payments, enter the information as reported on your W-2. Enter the amount you received for IHSS Payments in Box 1 (even if this amount is not reported in box 1 of your W-2.)
5. If you did not receive a W-2, per IRS Form 1040 Instructions, you may still enter the amount of IHSS Payments in Box 1 for the purpose of claiming the credit.
6. If you received a 1099 and choose not to report it as earned income to receive a credit: Scroll down to "Less Common Income" and click on Show More.
7. Click on Start or Revisit next to Miscellaneous Income, 1099-A, 1099-C. Then click on Start or Revisit next to Other reportable income and select Yes
8. Enter "In-Home Supportive Services Payments, EIN # (enter EIN number from 1099)" in the description box and then enter the amount from your 1099. Click Continue.
9. To enter the offset for the payments (whether you chose to report as earned income or a 1099): Click on Wages and Income at the top. Scroll down to "Less Common Income" and click on Show More. 
10. Click on Start or Revisit next to Miscellaneous Income and then click on Start or Revisit next to Other Reportable Income and select "Yes" or "Add Another Income Item" if applicable
11. In the "Description" section, enter "IRS Notice 2014-7 excludable income" and in the "Amount" section, enter the W-2 box 1 amount (or amount of IHSS Payments) as a negative (-) number

[lrsdranger82nd]

The question I had was that under your instructions what are we supposed to do when asked for an employer ID which if we didn't get a W2, we don't have those numbers and the Turbotax program won't allow you to move to the next page unless you enter that information. 

[MarilynG1]

@lrsdranger82nd Per Expert @BarbaraW22:

• If you did not receive a W-2 or other tax form, you do not need to report the payments on your return. These payments are specifically exempt from income tax.

Click this link for more info on IHSS Payments. 

You can still claim the Recovery Rebate Credit with no income. Click this link for info on How to Claim the Recovery Rebate Credit with No Income. 

[Robertschmoldt]

What if I didn’t declare the tax exempt status until the middle of the 2020 year, therefore paid taxes for the first portion of the year which reflect on the W-2 sent to me?

Question: How do I get those tax withheld funds returned?  I do not see a clear way to request within TurboTax.

I am a provider for someone who lives with me.  

Thank you, Rob

[DMarkM1]

First, you will enter the Form W2 information per the form you received in the "Job (W2)" topic.  Next, you will offset the income reported in box 1 of your W2 by entering it as a negative amount in the "Other reportable income" topic.  

1. To enter the offset for the payments :Click on "Wages and Income" at the top. Scroll down to "Less Common Income" and click on Show More. 
2. Click on Start or Revisit next to Miscellaneous Income and then click on Start or Revisit next to Other Reportable Income and select "Yes" or "Add Another Income Item" if applicable
3. In the "Description" section, enter "IRS Notice 2014-7 excludable income" and in the "Amount" section, enter the W-2 box 1 amount (or amount of IHSS Payments) as a negative (-) number