IHSS Tax Exempt - Can't E-file with W2 having $0 in Box 1

[shykumar]

[LindaS5247]

If box 1 is $0, it doesn't matter what is shown for social security and Medicare wages or withholdings.  You simply leave the entire W-2 off your return, unless it will affect other credits on your tax return.

You need to add your wages to Box 1, Form W-2.  If you have no wages listed in Box 1 of your W-2 form you will need to enter your wages so that they are included for earned income tax credit (EITC).  Box 3 and Box 5 would show your social security and Medicare wages, which should be the same as Box 1.  It would be best to check with your employer to be sure there is no difference in the wages for any reason such as fringe benefits as example.

Once you know the number you should enter it in Box 1 so that TurboTax knows you have wages that qualify for IRS Notice 2014-7 excludable income.

Likewise you still enter the negative income to remove it from taxable income.  This will allow it to be reviewed in TurboTax for the EITC.

Note: These wages are included as earned income for earned income tax credit (EITC) even if you do not include those wages as taxable income.  

If your payments qualify to be excluded you should complete your tax return. 

• Medicare Waiver Payments Exclusion
• IRS Publication 596 (will show the income chart for EITC)
• Form 1040 Instructions, page 40.

[june100]

IHSS is my only w2 return this year. So I put $1 in box 1 even though it's 0 on my w2? Then the refund went up from zero to $2. Would I need to pay back that $2? since I'm trying to efile it.

[Lance676]

Not for Madicare work.  You’d be missing out on a great tax credit.   I got a huge bump in refund for Federal and CA by adding this W2.

[DianeW777]

No.  However you are allowed to use those wages to see if you qualify for earned income tax credit (EITC).  See the information that follows:

You need to add your wages to Box 1, Form W-2.  If you have no wages listed in Box 1 of your W-2 form you will need to enter your wages so that they are included for earned income tax credit (EITC).  Box 3 and Box 5 would show your social security and medicare wages, which should be the same as Box 1.  It would be best to check with your employer to be sure there is no difference in the wages for any reason such as fringe benefits as example.

Once you know the number you should enter it in Box 1 so that TurboTax knows you have wages that qualify for IRS Notice 2014-7 excludable income.

Likewise you still enter the negative income to remove it from taxable income.  This will allow it to be reviewed in TurboTax for the EITC.

Note: These wages are included as earned income for earned income tax credit (EITC) even if you do not include those wages as taxable income.  

If your payments qualify to be excluded you should complete your tax return. 

• Medicare Waiver Payments Exclusion
• IRS Publication 596 (will show the income chart for EITC)
• Form 1040 Instructions, page 40.

@june100 

[waver123]

Hi Lance676 I believe you're replying to Linda's response about not including w2 if box1 is 0 but you're saying when you went over medicare tax limit due to multiple jobs then you're not getting the excess back since you're not reporting it in the tax return.

I was in this dilemma and finally just left it off since don't want to deal with hassle of can't efile it in, however I think I can mail in a form 843 separate from the return to report the excess medicare tax paid and get it refund, does anyone know if this is correct also?

[LindaS5247]

You can enter your wages if you think you are eligible for the credit as per the above posts.  If it has no effect you can leave it off.  Keep it for your tax records.

You need to add your wages to Box 1, Form W-2.  If you have no wages listed in Box 1 of your W-2 form you will need to enter your wages so that they are included for earned income tax credit (EITC).  Box 3 and Box 5 would show your social security and medicare wages, which should be the same as Box 1.  It would be best to check with your employer to be sure there is no difference in the wages for any reason such as fringe benefits as example.

Once you know the number you should enter it in Box 1 so that TurboTax knows you have wages that qualify for IRS Notice 2014-7 excludable income.

Likewise you still enter the negative income to remove it from taxable income.  This will allow it to be reviewed in TurboTax for the EITC.

Note: These wages are included as earned income for earned income tax credit (EITC) even if you do not include those wages as taxable income.  

If your payments qualify to be excluded you should complete your tax return. 

• Medicare Waiver Payments Exclusion
• IRS Publication 596 (will show the income chart for EITC)
• Form 1040 Instructions, page 40.

[Lance676]

The amount from Medicaid

[alyrey15]

So, if we have a W-2 with the amount as $0 in box 1. What do we do, in order to file our taxes? Because I am completely LOST

[Kupe]

Print and mail.   It’s a pain but that’s what we did.  

[Claudia323]

I'm having the same issue...I have already deleted the W2 form 2x and cleared the cache and I still keep getting the message regarding not being able to file due to box 1 being a $0 ...what else can I do to fix this issue? This is my first year trying to file on my own but am now having second thoughts due to this issue. 

[Kupe]

Claudia- print and mail the return.  We had to do the same last year for the same reason.  Worked fine…I had hoped IRS would fix this by now.  

[DaveF1006]

To avoid this, I have found in the past that you can efile if you post $1 as interest income.  You may try this before printing and mailing your return.

@Claudia323 

[Kevin5473]

I am live-in provider for my father and mother. Therefore i received 2 w-2 with same EIN number. The question are:

1. If i enter 2 w-2 into turbo tax and it will give me duplicate w2 error.

2. Box 1 showed 0. i can't e file

3. if i did Miscellaneous Income section and i will get less CA Refund.

[MonikaK1]

If the IHSS payments you received qualified as "difficulty of care" payments as explained in IRS Notice 2014-7, they may be excluded from income. If you didn't receive a Form w-2 or 1099, and you have confirmed the payments meet the criteria for exclusion, then you don't have to enter them on your return.

You may choose to include all (or none), but not part, of these payments in earned income for determining the Earned Income Credit or the Additional Child Tax Credit, if these payments are otherwise earned income (wages or income from self-employment).

See here for questions and answers from the IRS on this topic.

Follow the instructions shown below and in this help article to enter a Form W-2 from IHSS that has a zero in Box 1:

1. Sign in to TurboTax and open your return.
2. Select Search, enter w-2, and select Jump to w-2.
3. Enter all your W-2 info.
4. On the Let’s check for uncommon situations screen, select the box next to Nontaxable Medicaid waiver payments that qualify as difficulty of care payments.
5. Enter the amount of Medicaid waiver payments into the difficulty of care payment you received from IHHS box.
   • This is the same amount reported in boxes 3 and 5 of your W-2.
   • Your payments are nontaxable, but TurboTax uses this number to calculate credits you may qualify for.
6. When you get to the Earned Income Credit section in Deductions and Credits, we’ll ask if you want to add your Medicaid waiver payment to your income for this credit. You can answer based on what benefits you most.

Regarding two W-2's with the same EIN: the IRS will not allow it to be e-filed, considering it to be a 'duplicate W-2'  by the IRS computers.

If the EIN's are the same, you could combine the info into one W-2 entry.

 [Edited 02/10/24| 9:23 am PST]

@Kevin5473 (edited)