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how do I enter non-taxable w-income in proseries basic

TinyT
Level 2

how do I enter non-taxable w-2 income, specifically IHSS income where the provider lives with the recipient?

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4 Replies 4
TaxGuyBill
Level 14

Is the W-2 showing it as taxable?

If so, then 'back it out' as a negative number on "other income" on Schedule 1.

Don't forget that the IRS lets you choose if you want that income to qualify as "Earned Income" or not for purposes of the Earned Income Credit.  So if that is a possibility, go to the EIC Worksheet.

BobKamman
Level 14

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.

https://www.irs.gov/individuals/certain-medicaid-waiver-payments-may-be-excludable-from-income

 

cynthiaruiz1971
Level 1

What was the answer to the question, how to enter an IHSS income from a W-2 for a family member caring for and living with the payer.

 

How is the income off set?????????

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TaxGuyBill
Level 14

@cynthiaruiz1971 wrote:

What was the answer to the question, how to enter an IHSS income from a W-2 for a family member caring for and living with the payer.

 

How is the income off set?????????


 

Are you not able to see the two answers above?

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