Jackstax
Level 1
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I have a client who lives with her mother and is her caregiver. She received a form w-2 for this and federal taxes were withheld. Is this taxable? And if not, what does she do with the w-2, and the taxes that were withheld?

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BobKamman
Level 15
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Jackstax
Level 1
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Thank you, I will check this out!

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I have a client who lives with her mother and is her caregiver. She received a form w-2 for this and federal taxes were withheld. Is this taxable? And if not, what does she do with the w-2, and the taxes that were withheld

Im going to explain this, on your paystub it will usually show how many dependents you are claiming lets say for example on your paystub you are claiming 0 people but i the ended pf the year when you are filing taxes you are showing dependents that will definitely give you  a good refund since your federal tax withhold was 0, vice versa same rule apply if you have 2 dependents on the w2 you will be getting less money back from the IRS ON REFUND BECUASE THEY WERE WITHHOLDING LESS TAXES From you , I hope this answers your questions 

 

Taxes will be withheld on a w2 regardless on how many depdnest if you have or not 

 

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qbteachmt
Level 15
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It's "IHSS" and "Waiver under Notice 2014-7" as Medicare Payments for care. That's why you use the link provided by @BobKamman  for reference.

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Auyette
Level 1
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This is the relevant answer from the link provided:

"Q11. I received wage payments that are excludable from gross income under Notice 2014-7. However, the agency that pays me treats me as an employee and continued to withhold federal income tax on the payments and reported the payments as wages in box 1 of Form W-2, Wage and Tax Statement. How should I report to the Service that the payments are excludable from gross income?

A11. You should include the full amount of the payments reported in box 1 of Form W-2 as wages on line 1 of Form 1040 or Form 1040-SR. You should then subtract the excludable portion of the amount in box 1 on Schedule 1, line 8, “Other income,” of Form 1040 or Form 1040-SR. If you have other income reportable on Schedule 1, line 8, you should enter the net amount after subtracting the amount excludable from gross income under Notice 2014-7 from the other amounts reportable on Schedule 1, line 8. You may need to enter a negative amount on Schedule 1, line 8, if you have no other income reportable on Schedule 1, line 8, or if the amount of other income you must report on Schedule 1, line 8 is less than the amount excludable from gross income. You should write “Notice 2014-7” on the dotted line for Schedule 1, line 8,  if you file a paper return, or enter “Notice 2014-7” on Schedule 1, line 8 for an electronically filed return."

 

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