If I want the income to be excluded for caring for my adult son, do I need to request a corrected W2 from the agency or is there another way to get this income excluded?

Report income. As with any paid job, caregivers are legally required to report wages as taxable income. If at a later date your family member becomes eligible for Medicaid but your taxes have not been paid, Medicaid will consider the money a gift — not an expense. This could prevent your loved one from qualifying for Medicaid. On the other hand, the Internal Revenue Service is clear: When services are provided, all money received is a wage, not a gift.

you probably can claim you son as a dependent and deduct any medical expenses you paid.