Notice 2014-7

[stewart-2019]

I am a certified independent provider with the Ohio Departmental Disabilities. I have two clients. One   of the clients is my son who lives with me.  He has a state medicaid waiver that areexculdable under Notice 2014-7. The other client is also under Ohio Departmental Disbailities. I provide supervision once a week at my home. He does not live with me. I have medicaid waiver invoices that shows what was billed for both. At the end of the year I get a 1099NEC.  How do I show the amont for my son on schedule C

[Bsch4477]

Report on C as income. The go to other  income and enter the same amount as a negative number. This will zero out that income but will preserve that amount as earned income for earned income credit if otherwise qualified. 

Federal Taxes -> Wages & Income -> I'll choose what I work on -> scroll to the bottom and under Less Common Income select Start (or Update) for Miscellaneous Income.... You'll find all sorts of other income categories in there. If none of those shown fit the bill then pick Other reportable income and you can enter your own description(s) and amount(s). 

"Other expense" notated “Notice 2014-7”.

[stewart-2019]

I found out what you do. You include full amount that is reported on 1099 NEC as income on line 1 of schedule C. Then report the excluded amount as an expense in part V of schedule c and write NOTICE 2014-7 next to amount. 

[Bsch4477]

You can do that but if you do it that way your Medicare waiver payments won’t be considered earned income since it is zeroed out on Sch C.  If you are not eligible for earned income credit it makes no difference. But if you are eligible the method I described preserves your payment as earned income. 

[VolvoGirl]

Do you get a 1099NEC for all your clients including your son?  Or do you get a W2 for your son's payments?  Here's an old note I have.

Medicaid waiver payments to care provider. Certain Medicaid waiver payments you received for caring for someone living in your home with you may be nontaxable. If these payments were reported to you in box 1 of Form(s) W-2, include the amount on Form 1040 or 1040-SR, line 1. Also, include on line 1 any Medicaid waiver payments you received that you choose to include in earned income for purposes of claiming a credit or other tax benefit, even if you did not receive a Form W-2 reporting these payments. On line 8, subtract the nontaxable amount of the payments from any income on line 8 and enter the result. If the result is less than zero, enter it in parentheses. Enter “Notice 2014-7” and the nontaxable amount on the dotted line next to line 8. For more information about these payments, see Pub. 525.

[stewart-2019]

I get 1 1099 NEC and the total from my son and the other client. So I have to figure out the amount billed from my son to exclude 

 The balance is the other client.

[stewart-2019]

Some of that income is from my son and some is from another client. They added the two clients together and gave me  only one 1099NEC