W-2 2024 has $0 in box 1. Only box 12a has $$$ with code II

Forum|Forum|1 year ago
January 30, 2025
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I have been an in-home IHSS provider for my son who is now 8 years old. I always received a W-2 with wages in box 1. This is the first time in my W-2 I have $0 in all boxes except box 12a. I have always claimed earned income credit and child tax credit. This is why my concern. I do have dependents but don't know if I will be able to file or not.

RobertB4444

Level 15

Box 12 code ii represents "Medicaid waiver payments excluded from gross income". So the payments that you received do not have to be included in your taxable income. However, you can choose to include these amounts as earned income in order to qualify for the earned income credit and the additional child tax credit.

When filling out your tax return enter your W2 exactly as you received it. Then, copy the number from box 12 into box 1. That will allow you to treat the amount from box 12 as earned income.

Here is the IRS article on payments like yours.

This is the part that covers your issue-

Q9. I received payments described in Notice 2014-7 that are treated as difficulty of care payments under Section 131. May I choose to include these payments in earned income for purposes of the Earned Income Credit (EIC) or the additional Child Tax Credit (ACTC)? (added May 8, 2020)

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).

@Kurly27

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Kurly27Author

Level 2

Thank you so much for your quick response. Is this something I can do in Turbo Tax with a professional guiding me? If so what is the pricing? Would this return be qualified to be e-filed or would it have to be mailed?