Turbo Tax error? Notice 2014-7 Excludable Medicaid

[Coloradoaccess]

I have CNA income and received a W2 from the employer with income listed in Box 1. I followed the steps laid out ie show income and then subtract it from Other Miscellaneous Income. When I do this, my refund amount actually goes down.

Shouldnt tax refund amount be the same since I am adding CNA income in one place (w2) and taking out the same amount (showing negative income) in Other Miscellaneous Income? Wondering if there is an error with Turbo Tax software. Thanks 

[DawnC]

Are you sure you have a refund and not a tax-due amount that is decreasing?    Also, your Earned Income Credit might be decreasing by more than your income tax decreases from doing the adjustment.   Check your EIC before and after making the adjustment.   If adjusting the income in the Other Reportable Income section is causing your EIC to decrease by more than your tax (Line 16 of Form 1040), remove the adjustment.  

[Coloradoaccess]

Thanks DawnC.

The refund is from my husband's income from work and tax deducted by the employer. I first entered his W2 which showed a refund and when I added my own W2 CNA income and reversed it, the refund went down. 

[DianeW777]

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.

@Coloradoaccess