NEED HELP FILLING OUT MY W-2 INFO IN “TT” FOR IHSS MEDICAID WAIVER PMNTS. SO I CAN E-FILE WITH $0.00 IN BOX 1 AND GET EIC

[E-Rich333]

 Hello, I have been trying to file my 2024 tax return using free edition of TurboTax, since I’ve been having problems getting it to let me E-file because of the $0.00 amount in box 1 of my   W-2, I am now down to the April 15th deadline unfortunately🫤 so I would very much appreciate anybody who can help me with this problem before 12(Midnight) tonight on the west coast….

•  The problem I am having is TurboTax won’t let me E-file because my W-2 has a $0.00 amount in box 1 because I am a live-in IHSS provider which makes my income non-taxable because I am paid in Medicaid waiver payments. I do realize this means I don’t have to file a tax return but I am filing to get the federal and state (CA) Earned income tax credit, because I can use my Medicaid waiver income to calculate my EIC. I have done hours/days of research online and in the intuit website FAQ’s section which has quite a bit of people asking this same question and tax experts answering. The only problem is there is so many different conflicting answers and methods of going about filling out my return, I am honestly confused and not sure which method to go with? I was really hoping somebody could give me a definitive, confirmed to work method. I have read the one method saying to just put $1 in BOX 1 so that it will let me E-file? I’m uncertain of doing that though because that’s not what my W-2 says and I’m afraid I.R.S will reject it? Another method says to just put the amount in BOX 3 of my W-2 which is the amount I received in Medicaid waiver payments, in BOX 1 and then in the     (UNCOMMON SITUATIONS) section, click the box that says “MEDICAID WAIVER PAYMENTS” Some people had a problem with that method saying it counted their income twice? Then someone said to enter that amount in as a negative number somewhere else in the form and then it would subtract it on line 8 of my 1040 form or something like that?? And the last method I read was to leave the $0.00 in BOX 1 and then go down to the section where it says (Other types of income) and select “MISCELLANEOUS INCOME” then enter my Medicaid waiver payments amount there and then type in the box to explain what it is (“Medicaid waiver payments”) Again, I sincerely appreciate your time and effort on this subject. Hopefully together we can figure this out before the deadline at midnight tonight. I really could use the extra money right now from the EIC to pay some bills😊

[SharonD007]

When your W-2 has zeroes in all of the boxes except Box 12a, with code ll, that amount is your Medicaid Waiver Payments that are excluded from your income. To determine if you want to include this income on your tax return for your Earned Income Tax Credit, when you get to that section, you can elect to add the income or exclude it.  Try both ways to determine which way gives you the greater EIC.

Follow the steps below to enter your W-2

1. Open TurboTax
2. Select Federal Taxes
3. Select Wages & Income
4. Select Work on W-2
5. Enter your W-2, at the Let's check for uncommon situations; check the box next to Nontaxable Medicaid waiver payments
6. Continue following the prompts.

Review the TurboTax Help article How do I enter my tax-exempt Medicaid waiver payments from IHSS in TurboTax? for navigation instructions.

[E-Rich333]

Thank you so much for your reply. I just have a couple more questions. 

• First off I just wanted to inform you that my W-2 does not have all $0’s except for box 12. In box 3 my total amount of Medicaid waiver payments are stated. Also boxes 3 thru 6 have numbers in them as I have social security and Medicare taxes withheld. I also pay FICA. So the problem I had when trying to do the steps you mentioned is that when I fill in box 12 with the || the box that says “MEDICAID WAIVER PAYMENTS” in the (UNCOMMON SITUATIONS) section IS NOT there. It only appears when I leave box 12 blank. Moreover, If I put $0.00 in box 1, when I get to the end and try to file my return it says that the IRS has a law that will not let me E-file with a $0.00 in box 1 and I have to file by mail, which I can no longer do now because today is the deadline. So should I leave box 12 blank and enter the amount in box 3 into box 1 so that it will let me E-file? Or will the putting $1 amount in box 1 be ok with the IRS? OR should I enter my W-2 as is with the $0 in box 1, leave box 12 blank and enter my Medicaid waiver income payments in the section that says “OTHER TYPES OF INCOME” then select “MISCELLANEOUS” and type in what type of income it is? (E.G. Medicaid waiver payments) 
• Thank you again for your time. I truly appreciate it!😊

[skt]

I have the same problem. We have two W2s with $0 amount in Box 1 but Box 3-6 have numbers. Also, Box 12 code is II (Medicaid waiver payments ...) with Box 12 amount same as Box 3.

It's very confusing. 
Since I have other W2s, I am tempted to delete W2s with $0 in Box 1 and file my return.

Would appreciate any comment/feedback.

[Vanessa A]

The numbers in box 3, -6 do not affect your federal return.  This is your FICA taxes. 

The only numbers that matter in your case is box 1 and 12.  

You actually can delete these W-2's if you are not using them to claim the EITC and do not live in a state that does tax IHSS payments. 

You can also enter the income by following the steps below

Follow these steps to enter your IHSS payments AFTER deleting your W-2 by clicking the trashcan in the summary page next to the W-2:

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, if you select yes, 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

@E-Rich333 @skt 

[skt]

Thanks for your response @Vanessa A .
Regarding your point "... and do not live in a state that does tax IHSS payments. "

We are California residents where IHSS payments are being made. So, the above doesn't appear to apply. Do you have a different recommendation?
The payments and W2 were received for the two parents who live with us -  EIN is same but employer name is different. And the numbers in boxes 3-6 are different for each. Box 12 is marked with code "II" and the Box3 amount is same as Box 12. Additionally, Box 14 has CA-SDI payments as well.
I saw some recommendations to combine the Box 14 values and enter a single W-2. However, it's unclear if that can be done for Boxes 3-6 as well.

[Vanessa A]

California does NOT tax IHSS payments. 

Since there is nothing in box 1, you do not need to enter it in the W2 area. Do both you and your spouse BOTH get a W-2 for IHSS?

 You can enter it either as 2 different amounts by doing the steps I listed above or you can combine and enter as one amount. 

[skt]

Yes, both my spouse and I received W2s from IHSS for each parent (4 W2s in total)

[DianeW777]

If you follow the instructions in the link below to enter each W-2 for the IHSS waiver payments you will complete your return correctly.

• How do I enter my tax-exempt Medicaid waiver payments from IHSS in TurboTax?

@skt 

[skt]

@DianeW777Appreciate your response.
I reviewed this document/instructions How do I enter my tax-exempt Medicaid waiver payments from IHSS in TurboTax? However, these do not show how to handle with $0 amount in Box 1. Is there another set of instructions to follow?

[MonikaK1]

We will be editing the help article again. Thank you for bringing this to our attention. In some situations, users had been able to e-file with a zero in Box 1.

When you have a zero in Box 1, and entries in Boxes 3 and 5, and you want to use the wages to qualify for EITC, then instead of entering the wages in the W-2 section, you can enter just the IHSS Medicaid Waiver income that appears in Box 12 of your W-2 as follows:

In TurboTax Online:

1. Go to Wages & Income
2. Select Miscellaneous Income
3. Start or Revisit Other income not already reported on a Form W-2 or Form 1099
4. Answer Yes to Did you receive any other wages
5. Forward until you see the screen about Medicaid Waiver Payment Not Reported on Form W-2
6. Enter the amount in this screen (see screenshot below)

In Desktop versions:

1. Go to Wages & Income
2. Select Start or Update next to Miscellaneous Income
3. Select Start or Update next to Other income not already reported on a Form W-2 or Form 1099
4. Answer Yes to Did you receive any other wages 
5. Forward until you see the screen about Medicaid Waiver Payments Not Reported on Form W-2
6. Enter the amount in this screen (see screenshot below)

@skt 

@E-Rich333