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Level 2
December 7, 2019
Solved

How to claim medicad waiver on federal form

  • December 7, 2019
  • 1 reply
  • 11 views

Client had medicaid income reported on box 1 of his W-2 ,which it shouldn't how can i claim it as waiver on his 1040 form 

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Best answer by Just-Lisa-Now-

The IRS website explains how to deal with Notice 2014-7 wages.   Basically you just exclude them as a negative on Line 21.

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

If EIC is involved you may have to make a few other adjustments on the EIC worksheet so that the program doesn't use the excluded wages for EIC purposes.

1 reply

Just-Lisa-Now-
Intuit Community Champion
December 7, 2019

The IRS website explains how to deal with Notice 2014-7 wages.   Basically you just exclude them as a negative on Line 21.

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

If EIC is involved you may have to make a few other adjustments on the EIC worksheet so that the program doesn't use the excluded wages for EIC purposes.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
lilia12
Level 3
March 2, 2021

I am using basic pro-series, where do I exclude the medicare waiver payments. Notice 14-7?

Level 4
March 11, 2021

Enter the form it came on, then go to Other Income section and explain it is income under Notice 2014-7

enter same amount that was entered on the form it came on, but with a negative (ex. -500)