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April 16, 2025
Question

PLEASE HELP! HOW DO I ENTER MY INFO ON “TT” FOR IHSS MEDICAID WAIVER INCOME TO GET THE EIC AND BE ABLE TO E-FILE WITH $0 IN BOX 1

  • April 16, 2025
  • 1 reply
  • 0 views
  • First off I just wanted to inform you that my W-2 does not have all $0’s except for box 12. (Some people having my same issue have said this is what their W-2 looks like) In box 3 my total amount of Medicaid waiver payments are stated. Also boxes 3 thru 6 have numbers in them as I have social security and Medicare taxes withheld. I also pay FICA. So the problem I had when trying to do the steps the last expert told me to do is that when I fill in box 12 with the || the box that says “MEDICAID WAIVER PAYMENTS” in the (UNCOMMON SITUATIONS) section IS NOT there. It only appears when I leave box 12 blank. Moreover, If I put $0.00 in box 1, when I get to the end and try to file my return it says that the IRS has a law that will not let me E-file with a $0.00 in box 1 and I have to file by mail, which I can no longer do now because today is the deadline. So should I leave box 12 blank and enter the amount in box 3 into box 1 so that it will let me E-file? Or will the putting $1 amount in box 1 method be ok with the IRS? OR should I enter my W-2 as is with the $0 in box 1, leave box 12 blank and enter my Medicaid waiver income payments in the section that says “OTHER TYPES OF INCOME” then select “MISCELLANEOUS” and type in what type of income it is? (E.G. Medicaid waiver payments) or the last method I’ve heard is to do is enter the amount of my total Medicaid waiver payments in box 3 as a negative number somewhere on my form? E.G. -$12,000 (Can’t remember exactly where?) this way it will be included for calculating my Earned income tax credit but excluded for tax purposes, since my Medicaid pmnts. Income is Non-taxable.
  • Thank you for your time. I truly appreciate it!😊 I’ve been doing so much research trying to figure this out and been getting mixed/conflicting answers on how exactly to go about this and I’m down to the line now, got 1 hour left!😧

    1 reply

    Employee
    April 16, 2025

    @E-Rich333Looks like we are both dealing with the same issue. I am stuck as well.

    E-Rich333Author
    April 16, 2025

    I know right.. this new tax exempt Medicaid income is stupid. And I can’t get anyone to give me a straight answer??🙄

    CatinaT1
    April 16, 2025

    TurboTax can exempt income under Notice 2014-7 per the IRS instructions for Medicaid Waiver payments from IHHS. This Notice provides that certain payments received by an individual care provider under a state Medicaid Home and Community-Based Services Waiver (Medicaid waiver) program are difficulty of care payments and excludable as income. Additionally, you can choose to use this income to calculate Earned Income Credit. Regardless, the income will remain non-taxable.     

     

    Ensure you entered it according to these instructions: How do I enter my tax-exempt Medicaid waiver payments from IHSS in TurboTax?

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