How do I file IHSS relative care?

faithlantong Member Posts: 1 Newcomer

I received IHSS income for taking care of my grandpa and was told I didn't have taxes taken out nor should I have to pay taxes come tax season. How do I make sure to file this correctly?


  • Hank
    Hank Member Posts: 1 Newcomer

    If you lived with your Grandpa, your IHSS form W-2 would show zero federal income and zero state income. You would enter it as a regular W-2 form in FreeTaxUSA.

  • Henry
    Henry FreeTaxUSA Agent Posts: 86
    edited January 30

    Hi faithlantong! Thanks for your question.

    If you received IHSS "difficulty of care" payments, those are generally considered nontaxable Medicaid waiver payments. There are two different places to enter Medicaid waiver payments depending on how you received the payment.

    1-If these payments were reported in box 1 of a W-2, enter them by using this menu path: Income > Common Income > Wages (W-2).

    Then, if your IHSS payments are nontaxable, you can choose to subtract the nontaxable amount of the W-2 payments from your income on the Other Income screen by using this menu path: Income > Uncommon Income > Other Income. Look for the 'Medicaid Waiver or IHSS Payments to Care Provider' heading on that page.

    2-If you didn't receive a W-2 for these payments, you can enter them on the Other Income screen if you'd like to add them to your earned income (for calculating the EIC). Again, the menu path to get there is: Income > Uncommon Income > Other Income.