Since non-taxable Medicaid Waiver payments now qualify for EIC does that mean these payments could also disqualify you for EIC? Are they to be like combat pay and you get to choose which is most beneficial to include or exclude from EIC calculations?
EIC and Medicaid Waiver Payments
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The Instructions for Form 1040 indicate you can "choose" to include it or to exclude it. So you can pick whichever way gives the best result. -
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Interestingly, although the court did NOT rule on this, the 'tone' of the court case indicates the IRS had no authority to state that Medicaid Waiver payments are non-taxable in the first place.Comment
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