Just looking for the form number Medicaid Waiver payment exemption
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Yes, TurboTax can exempt income under Notice 2014-7 per the IRS instructions. 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.
If these payments are paid to you in box 1 of form W-2 (they should not), first try to get a corrected Form W-2 from the payer. If you cannot get a corrected Form W-2, follow these steps:
Do not enter the W-2 in the Wages & Salaries topic. Instead enter it as Other Reportable Income under the Miscellaneous Income section. Take the following steps:
This both shows and explains removing the W-2 income, placing a zero on Line 21 of your Form 1040.
If your W-2 has federal or state taxes withheld, you can enter these amounts in the Deductions & Credits section under Other Income Taxes as Withholding not already entered on W-2.
For more information, refer to IRS Notice 2014–7, 20144 I.R.B. 445 and the IRS FAQs.
Is there an updated way to enter this for this year's taxes? This worked for me last year and I didn't have any issues. Now, it won't let me file and says I cannot file because "TP other earned inc shouldn't be less than zero" and shows me the line with the negative number to balance out that excludable income.
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