Difficulty of Care Payments

[Nova87]

Hi All,

I have a client that received a W2 with no wages in Box 1, an amount in Box 12 with code II and wages/WH in boxes 16 and 17.  These payments represent Difficulty of Care Payments which are not includable in Gross income pursuant to IRS notice 2014-7.

I found the help on how to report these payments when they are not reported in Box 1 and followed the instructions.  The return is including it as other income on line 1d and then excluding them as a negative other income.  They are still being picked up and taxed in NJ so I have to figure that out and how to exclude them, but the return is throwing a critical efile error stating that there are no box 1 wages and highlighting the box 12 code but no further explanation.  The help says to enter the W2 as prepared, which I've done.

Has anyone had this issue?  How do I resolve it?

Thank you.

[George4Tacks]

Some preparers enter a wage of $1 to get it past the error checking.