IHSS W2, $0 in Box 1
For 2024, I was a live-in provider for my grandpa and received a W2. Box 1 and Box 2 have $0.00 wages, Boxes 3-6 have wages & tax withheld (social security wages & taxes, medicare wages & taxes), then box 12a has an amount, the same number as box 3 and 5.
I put this in as a regular w2 however before I click to e-file it says that because the state taxable income (boxes 16-17) is $0, I will need to paper file?
Is there a way around this? I know that this falls under Notice 2014-7.
How would I properly file this on my taxes? I don't want to mail in a tax return.
Thanks!
Answers
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I'm not sure why you need to enter anything in the state taxable income section. If box 1 is $0 there should be no reason why box 16 can't be $0. But maybe the FreeTaxUSA people can clarify. I've never done a Medicaid Waiver return in FTUSA so I don't know if there's a place to identify it as such. There should be a code 'II' in box 12, but that's a new thing this year.
Do you have any other income? The IRS won't accept an e-filed return with $0 AGI. You can get around this by putting $1 in interest income (the payer can be "to force e-file").
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Yes, I do have other W2 from my other part time job. Should I just not add the W2?
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Yes there is a “II” code in box 12.
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You have to enter ALL of your W-2s.
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There is a place to put the income in other but I think the question is, do we need to enter the W2 at all? I did add the W2 and I get an error saying I cannot file electronically as is. What is the work around? Turbo tax users say to put a 1 in the wages to get passed the error in state returns filed electronically.
This really seems like a bug with free tax USA. They should know it is medicaid waiver because we check that box and should direct you on what to do with the W2 or update info so the transmission is not an error.
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Is the problem the W-2 or the fact that your AGI is zero? What's the reason given for it not allowing it to e-file? If it's the AGI, I explained about the $1 in interest workaround.
The reason to enter the W-2 is that you are allowed to claim the Earned Income Credit based on those IHSS wages even if you choose not to have them taxed. (Some states also have an EIC.)
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Hello,
The IRS will not accept an e-filed return with zero wages in Box 1 of a W-2. If your Box 1 wages are blank or zero and there is nothing on the W-2 that affects your tax return, then don't enter the W-2. If Box 1 wages are blank but you have federal tax withheld or some other item on the W-2 that affects your tax return and you need to file this W-2, enter $1 as the amount of Box 1 wages.
Then, if you wish to include your nontaxable Medicaid waiver payments as part of your earned income to see if might benefit you more, please go to Income -> Other Income. There is a line that says “Medicaid Waiver Payments to Care Provider”. If you say Yes, there will be a place for you to enter the non-taxable income. It will not be taxed, just included as part of the calculations for the earned income credit.
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My issue is that before I begin to file, I get an error message saying that because boxes 16-17 (state wages and state income tax) are 0.00, I will need to paper file. I've done the $1 trick and I still get the same error message.
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My issue is that before I begin to file, I get an error message saying that because boxes 16-17 (state wages and state income tax) are 0.00, I will need to paper file. I've done the $1 trick and I still get the same error message. I already have other income from another job.
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Can you please log into your account and contact Support? They will be able to view your account information, view the alerts you are receiving, and properly guide you. Thanks!
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