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Medicaid waiver payment on 1099 NEC-Notice 2014-7

Forum|Forum|3 years ago
April 11, 2023
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I received Difficulty of Care (IHSS) payments for 2022 ( I live with the care receiver in the same house), but the tax form I received is 1099 NEC. How can I file it in Turbotax premier so that it can be excluded from my gross income? do I have to use the schedule C if this income is excluded?

Best answer by CatinaT1

I am going to give you updated instructions for entering this. You will want to delete the 1099NEC you entered and do not enter it anywhere except for here using the instructions below.

Follow these instructions to enter it: 

Click on Wages and Income at the top of the screen
Scroll down to "Less Common Income"; 
click on Show More;
click on Start or Revisit next to Miscellaneous Income, 1099-A, 1099-C;
click on Start or Revisit next to Other income not already reported on a Form W-2 or Form 1099;
Did you receive other wages? Say yes;
Wages earned as a household employee, leave blank and click continue;
Sick or disability pay, leave blank and click continue;
The next question asks about non-taxable Medicaid waiver payments. Enter the amount here,
Click Continue.

For more information, refer to IRS Notice 2014–7, 20144 I.R.B. 445 and the IRS FAQs.

@gaowei415

DaveF1006

You must report it but you can exclude it after it is reported.

Click Federal Taxes -> Wages & Income
Scroll down to Less Common Income Go to the last selection, Miscellaneous Income and click Start
Go to the last option, Other reportable income and click Start
When it asks, "Any other reportable income?" say yes and then type 2014-7 income Reported on a 1099 NEC and then the income amount.
On the line below that, type in 2014-7 income excluded under IRS provision and the full amount of this amount with a minus sign negating the income.

Reporting this income in this manner will prevent you from reporting this on a Schedule C.

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G

gaowei415Author

Hi Dave,

Thank you for the instruction, but before I do this, when the app asked if I receive any 1099NEC, do I still fill out that first? Now I have it filled, should I delete that 1099nec income?

Thank you!

Wei

CatinaT1Answer

I am going to give you updated instructions for entering this. You will want to delete the 1099NEC you entered and do not enter it anywhere except for here using the instructions below.

Follow these instructions to enter it: 

Click on Wages and Income at the top of the screen
Scroll down to "Less Common Income"; 
click on Show More;
click on Start or Revisit next to Miscellaneous Income, 1099-A, 1099-C;
click on Start or Revisit next to Other income not already reported on a Form W-2 or Form 1099;
Did you receive other wages? Say yes;
Wages earned as a household employee, leave blank and click continue;
Sick or disability pay, leave blank and click continue;
The next question asks about non-taxable Medicaid waiver payments. Enter the amount here,
Click Continue.