I received a w2 for ihss work that is tax exempt. It correctly reports 0.00 in box 1. do I have to include this in the return? it seems if I do, I can't efile.

[DaveF1006]

To clarify, are there other entries reported on the W2?

[dhaegele1]

Yes, boxes 3,4,5,6. Thanks

[JamesG1]

Generally, you can enter '0' in box 1 and you are allowed to efile.  However, if your income does not exceed the maximum Social Security earnings of $142,800, you do not have to enter the W-2 for only boxes 3, 4, 5 and 6.

Per IRS Notice 2014-7, payments from a state Medicaid Home and Community-Based Services program are considered "difficulty of care" payments and are specifically excluded from gross income for income tax purposes. Please see this IRS article for more information. 

Do you have qualifying children as dependents on your tax return?  This income may count towards the Earned Income Tax Credit.

[dhaegele1]

thank you for your response, but when I entered 0 in box 1 I was not able to efile. turbo tax said I had to mail in the return. so I reported the w2 in miscellaneous income and was then able to efile. 

[ysun]

I have the same situation. I was able to e-file last year that way, but this year I realized that the social security and and medicare tax withheld will not be reported that way and I heard it would affect our social security payment after retirement. Any experts here can confirm this?  Thank you!