INCOME EXEMTION

Forum|Forum|5 years ago
February 28, 2021
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Best answer by tax2021_K

the IHSS income I received W2 !6,320.-- This amount from Medical Exemption, IRS Notice 2014-7

This above amount I want to be Exemption, on the line xxxx (21) Adjustment, Last Year I used the TAXACT

I do on the Schedule 1 , This year I used the Turbo Tx I Don't know how I enter the amount exemption above

Pl Help

Thank

xmasbaby0

Level 15

Please ask a clear and complete question if you need help. This is not live chat. You need to ask clearly.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

tax2021_KAuthorAnswer

Level 2

the IHSS income I received W2 !6,320.-- This amount from Medical Exemption, IRS Notice 2014-7

This above amount I want to be Exemption, on the line xxxx (21) Adjustment, Last Year I used the TAXACT

I do on the Schedule 1 , This year I used the Turbo Tx I Don't know how I enter the amount exemption above

Pl Help

Thank

CatinaT1

Level 15

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:

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);

Click on Federal Taxes at the top of the screen;
At the bottom of Your Income box pick the option in blue to help me add other income, then jump to full list;
Scroll down the page to the last section titled: Less common Income and click show more;
Select start or update next to the last topic titled Miscellaneous Income, 1099-A, 1099-C;
Scroll down to the last option titled Other reportable income and select start or edit;
When it asks, "Any other reportable income?" say yes then you will make two entries:
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.
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.

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