How do I neutralize W2 income under IRS Notice 2014-7.

[garman22 · Accepted solution]

Make an adjustment on other income to back it out with the notice 2014-7 as explanation.  

[JML222]

seems to require linking to a Sch C, not working

[Just-Lisa-Now-]

You don't need Sch C to write in something on Line 21 of Sch 1.

[Marc-TaxMan]

1040, Sched 1, Line 21, as a negative #.  My explanation is: Notice 2014-7

[JML222]

Entering a negative number on line 21 does not carry thru to line 22 and reduce total income.

[Just-Lisa-Now-]

Sure it does, see these screen shots

[TaxGuyBill]

Also, if EIC is potentially involved, you need to go to the EIC worksheet and say the income was earned as an inmate.

[Just-Lisa-Now-]

The W2 worksheet has a box Park V Question Ja if it was earned as an inmate in a penal institution...will that work too?

[TaxGuyBill]

Probably, but I haven't tried that.