My income is not being excluded for medicaid waiver "difficulty of care" payments

[user17731710588]

My W2 has blanks in boxes 1 and 2, but boxes 3-6 are filled in with social security and Medicare wages and associated amount of tax withheld.  I believe that is valid since I work as an employee.  Box 12a is filled in with a DD code to indicate that payments were made for health insurance coverage.  I am not claiming EITC.

Whatever approach I take, I end up getting taxed on the income that should be non-taxable.

I have worked through the advice given in the community forums.  First, I entered the W2 replacing the blanks in boxes 1 and 2 with zeros.  Then in response to "Let's check for other situations", I checked the box for "Non-taxable Medicaid waiver payments that qualify as difficulty of care payments", and then entered the non-zero value of box 3 (social security wages).

Secondly, I deleted the W2 and signed off and back on again.  I then found the section for "Less Common Income"/"Miscellaneous Income, 1099-A, 1099-C"/"Other income not already reported on a Form W-2 or Form 1099" and checked the box "Nontaxable Medicaid waiver payments not reported on a W-2 or 1099", and then entered the income figure from box 3.

I am at my wits end.  This worked fine last year.  I am baulking at seeking paid assistance for this issue because I believe this is a bug in TurboTax, and I shouldn't have to pay extra money just so someone can tell me how to get around the bugs in their product.

[DianeW777]

The results are good and here they are! 

1. Enter the amount of wages in box 1 (as if they had been placed there) > finish the W-2 screen
2. Continue to 'Let's check for other situations' > check the box next to 'Nontaxable Medicaid waiver payments that qualify as difficulty of care payments'
3. Continue > 'Let's check your Medicaid waiver payments' > Check the boxes 'All of it' and 'No'
4. Preview your return to look at the following lines:
5. Schedule 1, Line 8s you will see the negative adjustment carried to Line 9 on the 1040.

From the left rail menu in TurboTax Online, select Tax Tools (You may have to scroll down on the left rail menu.)

1. Select Tax Tools
2. On the drop-down select Tools
3. On the pop-up menu titled “Tools Center”, select View Tax Summary 
4. On the left sidebar, select Preview my 1040 

For TurboTax Desktop, change to 'Forms' and review the forms.                 

[user17731710588]

Thank you very much, that worked and I can verify that all the numbers add up.

[user17731710588]

It was a good answer, but I am angered by the fact that I got funneled into the Expert Assist track where I am being extorted to pay a mind blowing fee for a relatively simple tax return.  I have used Turbotax for several years, but I will not use TurboTax on this return or any future returns.

[p-m-hoffman]

Agreed!