How do i enter a W-2 from the IHSS when box 1 shows 0? I have read how to input the W-2 if there is an amount on box 1 but in this case there's only an amount on 3-6.

[Lisa995 · Accepted solution]

solved in comments

[the8qualities]

Thanks Lisa995! So are you saying we don't need to enter it for Federal taxes but we do for State? What about the other boxes on the W2? My W2 shows zero for Box 1 but the boxes are not zero for state income and state income tax. So does that mean I don't need to enter it when filing my Federal taxes but I do have to enter it when filing my State taxes? Thanks!

[Lisa995]

If your state is CA, then you don't need to include any income for the state either.  CA also excludes IHSS income, I'm not familiar with other state requirements.

[mspassi]

I have 0 in box 1 but box 3-6 are populated; so if I dont report the w-2 income how do I make sure I get the credit for soc security taxes and medicare taxes paid

thanks for the help.

[Critter-3]

@mspassi 

The credit for SS & Medicare are  not filed on an income tax return ... a copy of the W-2 with this info is sent to the SS administration  and that is how the info is registered. 

[Katherine S 63]

https://www.irs.gov/individuals/certain-medicaid-waiver-payments-may-be-excludable-from-income

This article says in Q9 that they can include their income in BOX 1 and then take the EIC  (Earned Income Credit)

[Critter-3]

That Q-9 answer doesn't allow you to just choose  to  make a W-2  box 1 entry to get the EIC  just because you want the credit and you cannot  add it to the EIC calculations without it being on the Wages line ... you cannot have the income excluded AND get the EIC.  

[Katherine S 63]

A9. Yes, for open tax years, you may choose to include all, but not part, of these payments in earned income for determining the EIC or the ACTC, if these payments are otherwise earned income (wages or income from self-employment).

I did find with my customer that their income was over the $15980 (2021) for EIC so it made their taxes higher and they did not qualify for EIC.  

[Yatziryp91]

@Katherine S 63 So I’m in same situation. I am a provider for my brother whom lives with me. My w2 shows 0 for Box 1 but boxes 3-6 are filled in. I want to get earned income credit. So are you saying I can input my wages from box 3 in box 1?

[Yatziryp91]

@the8qualities Did you end figuring out if you can claim wages for earned income credit even though box 1 shows 0?

[Yatziryp91]

@mjelinch hello, I’m in the sale dilemma. I’m an ihss provider for my brother and my w2 box 1 shows 0. How can I get earned income credit still? ?

[Critter-3]

If the employer will not correct the W-2  form then in the TT program  you enter the W-2  box 5 amount in box 1 in the program to generate the EIC   and then make a negative entry for the same amount in the miscellaneous income section ...  follow these steps :

• Down the left side of the screen, click Federal.
• In the center of the screen, click Income & expenses.
• On the screen Your income and expenses, scroll all the way down to the last section, Less Common Income.
• Click the Start or Update button for the last topic, Miscellaneous Income, 1099-A, 1099-C.
• On the next screen, Let's Work on Any Miscellaneous Income, scroll down and click the Start or Update button for the last topic, Other reportable income.
• The next screen asks, Did you receive any other taxable income. Click Yes.
• On the next screen, Other Taxable Income, enter a description ( Notice 2014-7) and the amount with a negative sign). Click Continue.
• On the next screen click Done.

[Boytroy88]

Any update on this?  Won't that trigger an audit?

[Boytroy88]

https://www.irs.gov/individuals/certain-medicaid-waiver-payments-may-be-excludable-from-income

Read the answer to Q9 (A9).  It says for purposes of EIC or ACTC you can enter all of wages in box 5 but not partial.

[Boytroy88]

You are right.  This is from the IRS website (https://www.irs.gov/individuals/certain-medicaid-waiver-payments-may-be-excludable-from-income:(

Q11. I received wage payments that are excludable from gross income under Notice 2014-7. However, the agency that pays me treats me as an employee and continued to withhold federal income tax on the payments and reported the payments as wages in box 1 of Form W-2, Wage and Tax Statement. How should I report to the Service that the payments are excludable from gross income?

A11. You should include the full amount of the payments reported in box 1 of Form W-2 as wages on line 1 of Form 1040 or Form 1040-SR. You should then subtract the excludable portion of the amount in box 1 on Schedule 1, line 8, “Other income,” of Form 1040 or Form 1040-SR. If you have other income reportable on Schedule 1, line 8, you should enter the net amount after subtracting the amount excludable from gross income under Notice 2014-7 from the other amounts reportable on Schedule 1, line 8. You may need to enter a negative amount on Schedule 1, line 8, if you have no other income reportable on Schedule 1, line 8, or if the amount of other income you must report on Schedule 1, line 8 is less than the amount excludable from gross income. You should write “Notice 2014-7” on the dotted line for Schedule 1, line 8,  if you file a paper return, or enter “Notice 2014-7” on Schedule 1, line 8 for an electronically filed return