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sweetpet911
New Member

I received W2 from IHSS for my client in CA. I also received a 1099 misc from my client for the difference IHSS pays and what she pays. How do I file the 1099misc?

 
2 Replies
Coleen3
Intuit Alumni

I received W2 from IHSS for my client in CA. I also received a 1099 misc from my client for the difference IHSS pays and what she pays. How do I file the 1099misc?

The income from the W-2 can be excluded. See instructions at the end. 

For the 1099-MIsc, 

Instructions

  1. Open your return.
     (To do this, sign in to TurboTax and click the Take me to my return button.)
  2. Search for “1099-misc” at the top. In the search results, click the “Jump to” link.
  3. Now follow the screens to enter your 1099-MISC info and answer some questions

IHSS

 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: 

  1. Sign in to TurboTax Online, click Continue your return, then pick up where I left off (if you are using TurboTax CD/ Download, then just open your return on your computer);
  1. Click on Federal Taxes at the top of the screen;
  2. At the bottom of Your Income box pick the option in blue to help me add other income, then jump to full list;
  3. Scroll down the page to the last section titled: Less common Income and click show more;
  4. Select start or update next to the last topic titled Miscellaneous Income, 1099-A, 1099-C;
  5. Scroll down to the last option titled Other reportable income and select start or edit;
  6. When it asks, "Any other reportable income?" say yes then you will make two entries:
  7. Your first entry description would be W-2 EIN # (enter EIN number from W-2) Box 1 Medicaid Waiver Payments, and enter the Box 1 amount as a positive number.
  8. Next you click "Add Another Miscellaneous Income Item," and enter this description: IRS Notice 2014-7 excludable income and enter the W-2 Box 1 amount as a Negative (-) number. 

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.

user32745
New Member

I received W2 from IHSS for my client in CA. I also received a 1099 misc from my client for the difference IHSS pays and what she pays. How do I file the 1099misc?

how do i make the ihss income non taxable in my California tax return form
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