Medicaid Waiver Payments May Be Excludable From Income

luoyining88
luoyining88 Member Posts: 5 Newcomer
edited January 2024 in Retirement Income

Does FreeTaxUSA software include "Medicaid Waiver Payments is Excludable From Income"?

Tagged:

Best Answer

Answers

  • KristineS
    KristineS FreeTaxUSA Agent Posts: 232

    Hi luoyining88,

    Yes, FreeTaxUSA software allows you to exclude Medicad Wavier payments, also know as difficulty of care payments.

    If you're an eligible care provider and you received Medicaid waiver payments for caring for an eligible individual living in your home under a state waiver program's plan of care, the payments are treated as nontaxable difficulty-of-care payments and must be excluded from your gross income.

    If nontaxable Medicaid waiver payments are reported to you as income in Box 1 of Form W-2, you can subtract out the nontaxable amount of the payments from your income.

    There are two different places to enter Medicaid waiver payments. Where you enter them depends on how you received the payment:

    • If you received these payments in box 1 of Form(s) W-2, enter them on the Wages (W-2) screen.

    • 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.

  • tishlaw
    tishlaw Member Posts: 1 Newcomer

    I received these payments and I entered them in the Wages Screen. Now what? Where do I enter them to subtract them from my income??

    If nontaxable Medicaid waiver payments are reported to you as income in 

    Box 1

     of 

    Form W-2

    , you can subtract out the nontaxable amount of the payments from your income

  • CoryF
    CoryF FreeTaxUSA Agent Posts: 160

    Thank you for joining our community, Tishlaw.

    You will need to navigate to the Other Income section. You need to Click the Income menu (tab) and click the link for Other Income. On that page scroll down to the question Medicaid Waiver Payments to Care Provider and answer the question, Yes. This will cause boxes to appear for you to enter the W-2 wage income that qualifies to not be included in your tax return.

    If you have further questions, please visit the Support center located in the top right of your screen to contact our Support teams directly

Categories