How to exclude Medicaid waiver payments from income in ProConnect Tax

Follow these steps to report qualified Medicaid waiver payments excludable under IRS Code Section 131 per Notice 2014-7:

1. Go to the Input Return tab.
2. On the left-side menu, select Income.
3. Select Wages, Salaries, Tips (W-2).
4. Enter all information as reported on the W-2.
5. On the left-side menu, select SS Benefits, Alimony, Misc. Income.
6. Enter the excludable amount in the one of the following boxes:
   • Nontaxable medicaid waiver payments to care provider to include earned income that were not reported on W-2, Box 1
   • Nontaxable medicaid waiver payments to care provider to include earned income that were incorrectly reported on W-2, Box 1

The amount you enter will flow to Schedule 1, line 8s.

Related topics

• IRS Notice 2014-7
• Certain Medicaid Waiver Payments May Be Excludable From Income