Is there any instructions on excluding wages (caregiver payments) from income.  Mother received care giver payments ( medicaid waiver) for her son that lives in his own apartment.  Mother recieved W2 where federal wages are shown in box 1 .  For her situation, I think her wage is taxable because she did not live with son.    I am alittle baffled because we rely on the reported wages per W2. 

thanks for your help.

John