Hello,I did all of the steps below, but TTax shows my Federal Tax Due is the same amount reported on box 12a. I know I don't have to enter this W2 but I am curious why TTax shows this amount of tax due. Thanks! I received a W-2 with $0 in Box 1: Sign in to TurboTax Online, click Continue to your return, then pick up where I left off (if you are using TurboTax CD/ Download, then just open your return on your computer); Click on Federal Taxes, and then click on Wages & Income; Under Wages and Income, click Start; Click on Work on my W-2, and enter the information as reported on your W-2. After entering all your W-2s, you will see the screen, Let’s check for uncommon situations. Next to Nontaxable Medicaid waiver payments, check the box. You will enter the amount of Medicaid Waiver Payments into the box asking for the total amount of difficulty of care payment you received from IHHS. This will be the same amount reported in Boxes 3 and 5 of your W-2.

Question

IHSS Income tax exemption

Forum|Forum|1 year ago
March 6, 2025
1 reply
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Hello,

I did all of the steps below, but TTax shows my Federal Tax Due is the same amount reported on box 12a. I know I don't have to enter this W2 but I am curious why TTax shows this amount of tax due. Thanks!

I received a W-2 with $0 in Box 1:

Sign in to TurboTax Online, click Continue to your return, then pick up where I left off (if you are using TurboTax CD/ Download, then just open your return on your computer);
Click on Federal Taxes, and then click on Wages & Income;
Under Wages and Income, click Start; 
Click on Work on my W-2, and enter the information as reported on your W-2.
After entering all your W-2s, you will see the screen, Let’s check for uncommon situations. Next to Nontaxable Medicaid waiver payments, check the box.
You will enter the amount of Medicaid Waiver Payments into the box asking for the total amount of difficulty of care payment you received from IHHS. This will be the same amount reported in Boxes 3 and 5 of your W-2.

R

RobertB4444

This is a known issue that is apparently being worked on. The system assumes that when you enter a W2 with no information except what is in box 12a then you are trying to include it in earned income for purposes of receiving the earned income credit.

You don't need to enter this W2 at all, as you know, but if you are going to enter it you should enter the amount in box 12a as 'Medicaid Waiver Payments Not Reported on a W2 or 1099'.

@ld082154

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