Medicaid Waiver Payments

[Bonnie]

Wondering if anyone has dealt with the new law that says Medicaid Waiver payments are now non taxable if the taxpayer lives in the home with the payee? What is proper way of handing this? I've heard a couple different ways of handling the W-2 which is issued and has to be accounted for.

[TaxGuyBill]

Here is an IRS FAQ: http://www.irs.gov/Individuals/Certa...le-From-Income

[mastertaxguy]

Medicaid waiver payments

Wondering if anyone has dealt with the new law that says Medicaid Waiver payments are now non taxable if the taxpayer lives in the home with the payee? What is proper way of handing this? I've heard a couple different ways of handling the W-2 which is issued and has to be accounted for.

Also see TTB P. 5-18.

As this ruling/notice was retroactive to open tax years do not overlook possible amendments for earlier tax years if applicable to your client/fact situation.