Medicaid Waiver Payments - Submit W2 or not?

[megank1]

Hi. I have Medicaid Waiver Payments and my W2 box 1 is blank. There are value in box 3,4,5,6 and 12  code II. First of all, this is what 2024 1040 booklet page 24 says: "If you received nontaxable Medicaid waiver payments, and box 1 of your Form(s) W-2 is blank or has zeros, and you are choosing not to include nontaxable payments in earned income for purposes of claiming a credit, do not attach any of these Form(s) W-2 to your return."

My W2 box 1 is blank and I don't want to include this nontaxable income to my tax return. I am not claiming EIC either. However, W2 box 4 and 6 have value for Social Security Tax Withheld and Medicare Tax Withheld. I know my employer already submitted a copy of my W2 to the IRS. Now, here is my question. Do I still need to submit my W2 to the IRS? If I don't submit W2, does it affect my future social security and medicare benefits when I retire? Please help......

[SharonD007]

No, you don't need to submit your W-2 to the IRS because they already have your W-2  The Social Security Administration also has your information from your W-2; not filing your W-2 won't have an impact on your future Social Security or Medicare benefits.

For more information, refer to the IRS website Certain Medicaid Waiver Payments May Be Excludable From Income.

[megank1]

SharonD007, thank you for your reply.

I want to know if I don't submit the W2(delete from my return) because box 1 is blank and I don't want to include this nontaxable income to my tax return, do I still need to enter the W2 information to the question asking me Medicaid Waiver Payments? Do I still need to tell turbo tax include or not include this income to my tax return?

[CatinaT1]

No, if box 1 is blank and you are not using the income for the EITC credit, you do not need to enter the W2 in TurboTax. Keep the W2 with your tax records, but nothing needs to be included on your return from it.