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April 4, 2023
Question

I qualify for a special circumstance for self-employment- it is called "Notice 2014-7"- how do I amend line 21 on my return to reflect this? amount was entered on 1099-mi

  • April 4, 2023
  • 1 reply
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how do I use "Notice 2014-7"?

1 reply

CatinaT1
April 4, 2023

Have you already filed and need to file an amendment, or need to change your current return prior to filing?

 

If you need to amend, do not amend until your original return has been fully processed to avoid unnecessary delays.     

  

See this TurboTax FAQ for help with amending.   

  

You can e-file your 2022 amended federal tax return, but most states require amendments to be printed and filed by mail.   

  

You can check the status of your amended return here, but allow three weeks after filing for it to show up.   

 

 

The entry for IHHS income changed this year for your Medicaid waiver payments. You will enter your W2, even though it shows $0 in box 1. 

  

TurboTax can exempt income under Notice 2014-7 per the IRS instructions. 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. You can choose to use this income to calculate Earned Income Credit. Regardless, the income will remain non-taxable.  

    

This is how you will enter your W2: 

  1. Sign into TurboTax Online, click Continue your return, then pick up where I left off (if you are using TurboTax CD/ Download, then open your return on your computer);  
  2. Click on Federal from the menu on the left-hand side and then click on Wages & Income at the top;  
  3. Click Edit/Add next to Job (W-2);   
  4. click on Add a W-2, and enter the information as reported on your W-2.  
  5. After you have entered all your W-2s, you will see a screen that looks like this, asking for uncommon situations. Make sure you check the box for Nontaxable Medicaid waiver payments.   

  

Let's check for uncommon situations 
These don't apply to most taxpayers, but we still have to ask if any are related to your work with abc. 
D Nonstandard W-2 (handwritten, modified, or altered) 
W-2 was corrected by my employer (Form W-2c) 
D Didn't get a W-2 (manually calculate my earnings) 
Unreported tips O 
D paid family leave O 
D Nonqualified pension plan not on my W-2 
Nontaxable Medicaid waiver payments that qualify as difficulty of care 
payments 
D Worked outside the U.S. O 
D Religious employment 
D Employed by a foreign government or international organization 
D Inmate or lived in a halfway house 
D None of these apply to me

    

You will then get to choose whether you want to include the income for Earned Income Credit.  

 

 

I'm unsure from what you wrote if you entered it as a 1099-Misc or received a 1099-Misc instead of a W2. If you received a 1099-Misc instead of a W2, follow these instructions to enter it.:  

 

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

 

  

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

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