We receive Medicaid waiver wages and don't have to pay federal or state taxes. Our W2 has zero Fed income reported but it does show income under State. How do we report?

[fvdberge]

The income is not taxable both Fed and State (WI) under IRS notice 2014-7 (difficulty of care payments).

[DianeW777]

Report the medicaid waiver payments using the steps in the link below. Follow the steps carefully based on your W-2.

• How do I enter my tax-exempt Medicaid waiver payments from IHSS in TurboTax?

Wisconsin (WI) begins with the federal AGI and so it should flow correctly.  Watch the screens in your state return to be sure.

@fvdberge

[Edited: 02/26/2025 | 7:27 AM PST]