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EIC and IHSS


Tax Prep by Deb

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I have a client who has received a W2 for in home health support service (box 1 shows 0)  that is excluded as gross wages due to notice 2014-7.  It was my understanding however that the amount she was paid could be used as income for purpose of Earned Income Credit.  Anyone know how to enter this in Drake? (Box 3 and 5 show the amount she was paid)

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FYI - ATX is still not doing it correctly either.  You have to fiddle around with the return to get it into the return as wages for EITC but not taxable for income (similar to military combat pay).  IRS has not acquiesced to the court case that allows IHHS payments to be classified in this manner.   That may (or may not) be the reason the software companies are not updating the software to handle the payments this way.

However, they did process a refund for a client of ours with this situation.   We cited the court case on the 1040X and they processed the refund.

Tom
Modesto, CA

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