w2's

Forum|Forum|3 years ago
January 29, 2023
2 replies
5 views

my wife's w-2 form

show's 0$ wages in box # 1

she didn't have no state or federal taxes deducted, her choice

she cared for her late grandma as a care taker

she only worked 6 month's

Best answer by Hal_Al

It appears that you have a "Difficulty of care" payment, which is not subject to income tax, but is subject to FICA (social security and medicare tax).

You can enter the W-2, exactly as received and it won't be taxed.

But, if you want it to count for the earned income credit and/or the child tax credit, enter $10,481.47 in box 1 at the W-2 screen. You will later take a deduction for that amount.

2022 New this year: The IRS has provided a place to deduct (line 8s of Schedule 1) the nontaxable income (but still allow you to claim the Earned Income credit based on that income).

TurboTax now smoothly handles it (it was complicated in previous years). At the end of the W-2 screens, you will encounter a screen titled "Let's check for uncommon situations". Check the box at "Non taxable Medicare waiver payments that qualify as difficulty of care payments". On the next screen, indicate the amount ( $10,481.47).

Reference:

https://www.irs.gov/Individuals/Certain-Medicaid-Waiver-Payments-May-Be-Excludable-From-Income

Hal_Al

Level 15

Who was the employer that issued the W-2? What was in boxes 3 & 5?

Grimaldo1975Author

Level 2

her grandma

amounts in boxes 3 & 5 are 10481.47

JohnB5677

Level 15

We'd love to help you complete your tax return but need more information. Can you please clarify your question?

Are there any entries on the W-2?
What are they, and what boxes are they in?
Did she actually get paid?

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Grimaldo1975Author

Level 2

yes she was paid for 6 months

box 1 0$

Box 2 0$

box 3 $10481.47

box 4 $649.85

box 5 10481.47

box 6 151.89

Hal_Al

Answer

Level 15

It appears that you have a "Difficulty of care" payment, which is not subject to income tax, but is subject to FICA (social security and medicare tax).

You can enter the W-2, exactly as received and it won't be taxed.

But, if you want it to count for the earned income credit and/or the child tax credit, enter $10,481.47 in box 1 at the W-2 screen. You will later take a deduction for that amount.

2022 New this year: The IRS has provided a place to deduct (line 8s of Schedule 1) the nontaxable income (but still allow you to claim the Earned Income credit based on that income).

Reference:

https://www.irs.gov/Individuals/Certain-Medicaid-Waiver-Payments-May-Be-Excludable-From-Income