IHSS and CHILD TAX CREDIT

She does qualify for the Child Tax Credit (and potentially the Earned Income Credit).  A court case clearly says the IRS doesn't have the authority to remove the credit that law provides (and strongly hinted they didn't have the authority to make the IHSS non-taxable, but they did not rule on that).

It is a bit tricky for how to figure out how to do it on ProSeries.  I don't have my program open now so I can't give you specific directions, but I think you start on an Earned Income Worksheet and then to odd Child Tax worksheet.

If you can't find it and nobody else gives the answer, post back again in a day or two and I'll look at how to do it.

She always gets the credit, but she hasn't filed for three years?  Too busy taking care of the MediCal patient, I suppose.  There is this FAQ from IRS, but @TaxGuyBill may have a better answer if there are cases where the credit is allowed even if the income is not taxed.

Q9. I received payments described in Notice 2014-7 that are treated as difficulty of care payments under Section 131. May I choose to include these payments in earned income for purposes of the Earned Income Credit (EIC) or the additional Child Tax Credit (ACTC)? (added May 8, 2020)

A9. Yes, for open tax years, you may choose to include all, but not part, of these payments in earned income for determining the EIC or the ACTC, if these payments are otherwise earned income (wages or income from self-employment).

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

Here's the case that deals with EIC and refundable child tax credit.

https://casetext.com/case/feigh-v-commr