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Medicaid Waiver Payments, W2 box 1 blank, new box 12 code II, E-file questions.

Hi. I have Medicaid Waiver Payments. My W2 box 1 is blank and I know I cannot e-file my tax return. However, this year the IRS include a new box 12 code II. If my W2 box 1 is blank and I enter a value in box 12 code II, can I e-file? Please verify this for me....thanks.

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3 Replies
Vanessa A
Employee Tax Expert

Medicaid Waiver Payments, W2 box 1 blank, new box 12 code II, E-file questions.

Yes.  Since you have nothing on your form other than something in box 12,  follow these steps which will allow you to enter your IHSS payments and still e-file while still being able to claim the EITC if you are otherwise eligible. 

  1. Select income
  2. Miscellaneous Income which is under Less Common Income
  3. Other Income Not already reported on a Form W-2 or Form 1099
  4. Select Yes to did you receive any other wages
  5. Continue to the box that asks for your Medicaid Waiver payments
  6. You will be asked about using this income for the Earned Income Credit
  7. After you do this, you will need to visit the credits and deduction section to answer the Earned Income Credit questions.
  8. Continue through to file your return

This should allow you to e-file

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Medicaid Waiver Payments, W2 box 1 blank, new box 12 code II, E-file questions.

 Vanessa A, thank you for your reply. That's not my question.

 

I want to know if my W2 box 1 is blank and it has value in box 3,4,5,6, 12 code II, and 14, can I enter this W2 normally and e-file? In other words, I have this new value in box 12 code II, can I just e-file even though box 1 is blank?

DianeW777
Employee Tax Expert

Medicaid Waiver Payments, W2 box 1 blank, new box 12 code II, E-file questions.

If there is no amount in any or some of Boxes 1 through 6, and you don't expect to otherwise qualify for Earned Income Credit or Additional Child Tax Credit, then you don't have to enter the W-2s at all. Details below and in the link provided.

 

If entering the W-2s could qualify you for the Earned Income Credit, and you know how much gross wages you received, then put that amount in Box 1 and then follow the steps in this help article to back out the income from taxable income only except as noted in bold:

 

  1. Select Search, enter w-2, and select Jump to w-2.
  2. Enter all your W-2 info as shown on your form, except Box 1 (this is assuming that the W-2 Box 1 is blank or zero).
  3. Enter the amount reported in box 3 of your W-2 in Box 1. In your situation, since you have zero in box 3, enter the actual amount of gross wages received.
  4. On the Let’s check for uncommon situations screen, select the box next to Nontaxable Medicaid waiver payments that qualify as difficulty of care payments.
  5. Enter the amount of Medicaid waiver payments into the difficulty of care payment you received from IHHS box.
    • This is the same amount reported in boxes 3 and 5 of your W-2 or the actual wages received if you have zero in boxes 3 and 5.
    • Your payments are nontaxable, but TurboTax uses this number to calculate credits you may qualify for.
  6. When you get to the Earned Income Credit section in Deductions and Credits, we’ll ask if you want to add your Medicaid waiver payment to your income for this credit. You can answer based on what benefits you most.

If you follow these steps, you are entering income and then backing out the income, so that it isn't backed out twice, and so that you are not entering a zero in Box 1 which may prevent e-filing.

 

@megank1 

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