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Level 1
September 22, 2022
New

Medicaid waiver payments

Related products:ProSeries
  • September 22, 2022
  • 2 replies
  • 3 views

Under IRS Notice 2014-7 certain Medicaid Waiver Payments may be excludable from income. Normally, taxpayers receive these payments through w2 or 1099-MISC. Like other tax software if ProSeries add a Box Titled "Medicaid Waiver Payment" in w2 and 1099 Misc worksheet it will be more convenience and save us a lot of time. Since Medicaid waiver payments can be includable or excludable to calculate EIC, if ProSeries add another box in w2 and 1099-MISC titled "Do you want to include Medicaid Waiver Payments in the calculation of EIC?" so we can choose Yes/No as needed. 

In order to enter Medicaid waiver payment in current ProSeries system, we need to calculate total wages manually that taxpayer receives from all w2s/1099 Misc under Medicaid waiver and then enter this amount in Other income as a negative balance. For the EIC calculation in current system, we need to change earned income amount manually in EIC worksheet back and forth to check maximum tax refund.  

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2 replies

Level 2
May 15, 2024

In the 2023 program I had difficulty finding the solution for calculating the correct amount of earned income credit when the taxpayer received Medicaid Waiver payments.  Now the providers don't include the difficulty of care payments in box #1 of the W-2 form.

Step #1 - include the full amount on line 1 of the W-2 (this is different from the amount shown by the provider).
Step #2 - In Part VI of the W-2 check box K(a) - "Box 1 wages include amounts excludable as difficulty of care payments.
Step #3 - In Part VI of the W-2 on line K(b) enter the amount of the difficulty of care payments.
Step #4 - On the earned income worksheet check Box A that states if any wages are Medicaid Waiver Payments that you choose to include in earned income.  

Intuit Community Champion
May 16, 2024

Everything you are proposing is already in ProSeries Pro