Do I have to file my IHSS W-2?

[ant53]

Do I have to file my W-2 for IHSS?

[Coleen3]

TurboTax can exempt income under Notice 2014-7 per the IRS instructions. This Notice provides that certain payments received by an individual care provider under a state Medicaid Home and Community-Based Services Waiver (Medicaid waiver) program, are difficulty of care payments and excludable as income. 

If these payments are paid to you in box 1 of form W-2 (they should not), first try to get a corrected Form W-2 from the payer. If you cannot get a corrected Form W-2, follow these steps: Do not enter the W-2 in the Wages & Salaries topic. Instead enter it as Other Reportable Income under the Miscellaneous Income section. Take the following steps: 

1. Sign in to TurboTax Online, click Continue your return, then pick up where I left off (if you are using TurboTax CD/ Download, then just open your return on your computer);

1. Click on Federal Taxes at the top of the screen;
2. At the bottom of Your Income box pick the option in blue to help me add other income, then jump to full list;
3. Scroll down the page to the last section titled: Less common Income and click show more;
4. Select start or update next to the last topic titled Miscellaneous Income, 1099-A, 1099-C;
5. Scroll down to the last option titled Other reportable income and select start or edit;
6. When it asks, "Any other reportable income?" say yes then you will make two entries:
7. Your first entry description would be W-2 EIN # (enter EIN number from W-2) Box 1 Medicaid Waiver Payments, and enter the Box 1 amount as a positive number.
8. Next you click "Add Another Miscellaneous Income Item," and enter this description: IRS Notice 2014-7 excludable income and enter the W-2 Box 1 amount as a Negative (-) number. 

This both shows and explains removing the W-2 income, placing a zero on Line 21 of your Form 1040. 

If your W-2 has federal or state taxes withheld, you can enter these amounts in the Deductions & Credits section under Other Income Taxes as Withholding not already entered on W-2.

For more information, refer to IRS Notice 2014–7, 20144 I.R.B. 445 and the IRS FAQs.

[jdelin83]

IHSS W-2 does not provide EIN number. What information should we enter since that is not there?

[JohnW222]

You should contact the provider of the Form W-2 to find the EIN. 

You need a W-2 with an EIN so that you can e-file your return.  To file without a W-2 form, you'd need to complete a Form 4852, Substitute Form for W-2, and you can't e-file this with your tax return.

[spressey]

The "Any Other Taxable Income" section states, "This is taxable income that has not been reported on your return."  Seems like the wrong place to put tax exempt income.  I know I did it this way last year, but don't remember the "taxable income" statement in there.

[aenochs]

If you had federal or state income taxes were withheld from your W-2 for IHSS wages, follow the instructions below to ensure you will be able to efile your return. Otherwise, you will have to print and mail your return.

https://ttlc.intuit.com/community/taxes/discussion/re-ihss-in[product key removed]eld/01/1211540

[luis619]

Thank you soooo much. Your info was super helpful! 

[hannahloo]

Hi-

How can I calculate and fill out my taxes if I have not received or can not find my w-2 form from California State IHSS as I work as a provider (NOT IN HOME - I do NOT live with the recipient).

I have tried calling them and I just get recorded messages.

Please help!

Thanks

[npierson7]

Normally we don't recommend that, however IHSS is extremely difficult to communicate with and they often don't send W-2(s), so it is common to substitute W-2 for this particular employer. To do so, you need to fill out Form 4852 Form 4852 using your last paycheck. You will need to print and mail your tax return to the IRS.   

[Anonymous]

Is this the same process I should follow for 2020 tax return?

I'm using the desktop version of TurboTax. I think the process is similar, but just confirming that I make the same entries.

[DaveF1006]

Yes, this is the same process for your 2020 returns.

[SoCalinhomeparentprovider]

Hello, can this also apply with TaxSlayer? I’ve never filed as an ihss in home parent provider ,don’t  have any taxes taken out and have never received a w2. This thread is so informative and helpful. Thank you all.

[sandorbatyi]

I was told by IHSS for when I filed my 2020 taxes, to ignore this income for my wife because we live together and she is taking care of me. I'm the IHSS recipient and she is the IHSS provider. She is receiving the payments from my Medi-Cal (basically). So, no state or federal taxes, and it is not income. That was when we first signed up for it, at the end of 2020.

My wife now received an entire year (2021) of income from IHSS. We live together, she is still my provider, and we file together as married filing joint.

I now (Jan. 2022) received a W-2 from IHSS. It shows me as employer with an EIN number and her as the employee. In #1 "Wages, tips, other compensation" the year's total is only about 20% of the actual amount.

Employer is my name, but employer address is a PO Box in Sacramento, CA (not our home address). Zero taxes withheld in boxes #2-6 (as well as state). Should I file this W-2 or ignore it?

[MarilynG1]

You are correct that IHSS income is non-taxable; however, some people want to file their W-2 in order to claim the Earned Income Credit. Tax law recently changed to allow the non-taxable income to be included for claiming the credit.

If you don't want to claim the EIC and the amount in Box 1 of your W-2 is below $12,550 (the standard deduction), you don't need to report it; just keep it for your records.  If it is above that amount, you can enter it in TurboTax and make an Adjusting Entry to make the amount non-taxable. 

Click this link for info on How to Manually Enter a W-2.

To make the Adjusting Entry:

Under Wages & Income, scroll all the way down the page to Miscellaneous Income, 1099-A, 1099-C.  On the next page, scroll all the way down to Other Reportable Income.

Enter 'IRS Exempt 2014-7' for the 'Description'  and enter the amount you reported in the W-2 section with a minus sign (-12420, for example).

[Nayj1]

I'm a live-in provider and had this same issue: no W2 or 1099 so no EIN but I have pay stubs with a YTD net pay.  I asked a TT live agent where to include these wages and stumped both the agent and their lead supervising agent.  Both told me that IHSS should be providing a 1099 (note to self: call the office when they open again to request one.  No idea if they will comply).  Soooo without either of these forms, what can a person do?  I want to e-file so using form 4852 to create a substitute W2 is out of the question.  I read the suggestion by @Coleen3  to skip the Wages & Income section altogether by entering the wages under Misc Income, specifically "Other Reportable Income" then offsetting the amount on an additional Misc Income entry.  That might work with a W2 or 1099, but many of us live-in providers don't receive either of those.    The logical conclusion in that situation seems to be to enter the wages under Misc Income as suggested but specifically under "Other income not already reported on a Form W-2 or Form 1099".   The IRS recognizes this section as income reported by household employees, taxable disability earners, and other wage earners who don't receive either of these forms.  Filing the wages is optional for IHSS workers, but who wouldn't want to claim the wages for the added EIC??  No entry is put on the next couple of screens.   Continue through the prompts under the "Employee Compensation Not Reported on a W-2" section. There is a place to record the wages here, and you will follow the same steps suggested by @Coleen3 to make 2 entries: one as "Medicaid Waiver Payments" for the employer name showing the amount of your wages, then another income entry when done with that as "IRS Notice 2014-7 excludable income" as the employer name showing your wages as a negative dollar amount.   For employer's tax ID number, there's an option to use the IHSS recipient's social security # so I did on both entries.  You will be required to choose a "reason code" at the bottom.  The choice that made the most sense for my situation was option C, and I used the date that I signed the IRS I-9 form with IHSS (showing my legal right to work as an employee for this recipient) as the "determination date".  Glad to be done with this now.  Hope this helps someone else.