How to claim medicad waiver on federal form

[Mikhael]

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 

[Just-Lisa-Now- · Accepted solution]

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.

[lilia]

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

[skeramidas]

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)