Client has W-2 with no Gross wages subject to FIT & SIT

[morena60]

Live in Provider and Waiver Personal Care Services-under IRS Notice 2014-7 wages received by WPCS providers who live with the recipient of those services are not considered part of gross income for FIT purposes.  I entered 0 wages, 0 FIT and 0 SIT,  SS wages and medicare wages were subject to taxes which is OK.  Lacerte included this in critical diagnostics that Wages for FIT is missing.  Can anyone tell me what to do? I would like to E-file the returns. There must be some tax preparers who have the same issues.  Please tell me what to do?

[TaxGuyBill · Accepted solution]

If the W-2 actually shows $0 (or blank) in Box 1, in most cases you can just not enter the W-2.

The only exception I can think of is if the taxpayer is over the Social Security wage limit, but I suspect that would almost never happen.

[itonewbie]

If your client received a W-2 reporting wages that could be excluded under Notice 2014-7 and your client is not able to obtain a W-2 to eradicate the excludable income, you should report the wages in Box 1 and Box 16 as usual but enter the amount that should have been excluded on Line 21 as a negative number with a reference to "Notice 2014-7".