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Ihss income

I received my W-2’s for my IHSS income. The amount in box 1 for my wages is different than box 3 and 5. I was a live-in provider for six months and a nonlive-in provider for the other six months of 2023. Under uncommon tax situations, would I mark The Nontaxable Medicaid waiver payments? If so, what amount what I use for the difficulty of care payment?

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2 Replies
Hal_Al
Level 15

Ihss income

Deleted

KrisD15
Employee Tax Expert

Ihss income

Additionally, if the amount in Box 3 and 5 is larger than the amount in Box 1, subtract box 1 from box 3 to get the amount considered "Difficulty of Care".

 

Example: 

Box 1    17,000

Box 3    30,000

 

Your difficulty of care payment was 13,000 (30,000 - 17000) since that amount was not included for Federal Tax, but was included for FICA withholding. 

 

If this is how your W-2 was reported, you made 13,000 for the services provided in home (Difficulty of Care) and 17,000 as services not provided as a live-in care. 

 

I assume Box 1 on your W-2 ONLY reports the TAXABLE wages. 

When you enter your W-2, you can select "Nontaxable Medicaid waiver payments that qualify as difficulty of care payments" if you wish, but if Box 1 is ONLY the wages earned when not living at the clients home, you do not want to adjust that amount. 

On the next screen you would select "None of it"  for "How much in Box 1 is difficulty of care payment?"

 

IF YOU WISH TO INCLUDE the difficulty of care payments (the addition might increase a credit) you can "enter the  total amount of difficulty of care payments you received from the state" on this screen as well. 

You would enter all or none of the Difficulty of Care portion.

 

This is IF box 1 does not include the amount of difficulty of care payments. 

If Box 1 is less that Box 3 I assume this to be true, but you might ask the state how they reported the W-2 if you are not sure. 

 

@Luckylinda1968 

 

 

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