IHSS Exempt Care Provider

[DaveF1006]

Yes, report this in this manner so that the exclusion appears correctly on your 1040.

1. Record the amounts of say $2000 in Boxes 1,3,5.  Leave Box 12 blank.
2. Now go to "uncommon situations, then select "nontaxable Medicaid waiver payment" and enter the amounts correctly as directed.
3. Now, this will appear as taxable income on Line 1 on your 1040 but then is excluded on Line 8 of the 1040.

I have seen posts that have said to record income in Box 1 and then make an entry in Box 12 but what this ends up doing is adding your income in Line 1A of the 1040 and then again in Line 1D of the 1040, thus doubling the income. Then there is an adjustment on line 8 for the amount of the Medicare waiver payments, but then you are still reporting income of $2000 after this is done.

The only other option in this case is to place a "zero" in Box 1 but then you won't be able to efile.  In addition, you wouldn't be able to use this income for important credits like the EITC, child tax credits, retirement contributions, or other credits that you may be entitled to.

[idunno3]

Hello, oh my goodness I have the exact same situation.  My tax person told me today that she's unable to file taxes for me because there isn't income in box 1 (all zeros except for 12a) and that my income isn't taxable. She said it was a change by the irs and they're trying to eliminate us filing for taxes because she said its like double dipping...meaning we don't have taxes withheld so shouldn't be allowed to file.  However, she said she doesn't agree with cases like ours where we have other children and should be able to file and claim child tax credit. But she still turned me away... I'm currently on line, you tube, etc trying to find an answer to our question.

[Vanessa A]

You are able to use the income to claim the Earned Income Tax Credit.  If you want to claim the EITC, then you can enter your W-2 following the instructions below.  If you do not want to claim the credit, then you do not need to enter the W-2.

I received a W-2 with dollar amounts in Box 1 and “II” in Box 12

If your W-2 includes an amount in Box 1 and Box 12 for tax-exempt Medicare waiver payments from In-Home Supportive Services (IHSS), you should request a corrected W-2 as your payments should only be reflected in Box 12.

If you can't get a corrected W-2, please follow the instructions below:

1. Open or continue your return.
2. Navigate to the W-2 section:
   • TurboTax Online/Mobile: Go to W-2.
   • TurboTax Desktop: Search for W-2 and select the Jump to link.
3. Enter all your W-2 info in the appropriate boxes in TurboTax as they're shown on your form, except leave Boxes 1 through 8 blank.
4. TurboTax will include the amount you entered in Box 12 as income on Line 1d of your Form 1040 and will subtract the amount on Line 8. This means you won’t be taxed on these wages on Form 1040.

If the only entry on your W-2 is in Box 12 (there's a blank or a $0 in Box 1), and you want to use the income to qualify for Earned Income Credit or Additional Child Tax Credit, you can enter the W-2 as is.

If the only entry on your W-2 is in Box 12 (there's a blank or a $0 in Box 1) and you don’t want to use the income to qualify for Earned Income Credit or Additional Child Tax Credit, you don’t need to enter the W-2 at all.