self certified ihss worker therefore box 1 shows 0 on my w2 but I qualify for the overtime deduction without putting an amount in box 1 or box 7 what do I do?

[tina_waldron]

turbo tax wont let me finish until I put one-third amount in box 1 or box 7

[KrisD15]

If you receive "Difficulty of Care" payments, which as an IHSS worker would, your earnings are already exempt from Federal tax. 

You are not subjected to Federal tax on that income, which is why Box 1 on your W-2 is zero. 

Since there is no Federal tax charged on your earnings, you would not (and can't) deduct Overtime. In order to deduct taxable income, that income must first be taxable. Your income (on that W-2) is NOT taxable, therefore it is NOT deductible. 

Difficulty of Care payments are reported and entered into the TurboTax program because that income could increase your Earned Income Credit, but it is not eligible for the "No Tax On Overtime" Deduction. 

[the-gack]

Hello,

Thank you for your reply to the previous poster. I believe we both understand that the overtime on the tax exempt income cannot be deducted. However, TurboTax does not seem to understand this; as one answers the questions and provides the requested information from the W-2 for the "Difficulty of Care" income, it automatically applies the overtime deduction and does not provide a clear option to omit this deduction. The workaround that I think I have found is that when it asks me for additional information about the Box 14 entry I changed the Category to "Other (not classified)". This appeared to prevent TurboTax from trying to apply the overtime deduction, but I would be far more comfortable if TurboTax recognized that this exempt income (and overtime) did not qualify for the deduction.

[DianeW777]

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@the-gack