Medicaid Services Waiver program payments

[FrebergCPA]

Married couple both approaching age 62 and are strongly considering starting Social Security Retirement benefits at age 62. They have an adult special needs child living with them. Husband receives annually Form W-2 for caring for the child. He has only a small amount of other income. Wife has been a teacher but has now retired.

My basic question is this: Does the Medicaid Services Waiver program income get counted as earned income for purposes of the Social Security earned income test? My research generally says is does not but I cannot find any specific documentation or site stating this. Virtually all of the income is shown in Box 12, Code II. Already know that it is not subject to income tax.

Thanks in advance for any site references.

[TaxGuyBill]

At first glance, it seems to me that it does count. But whether or not the Social Security Administration 'sees' it or not is another question.

The first link shows "All remuneration from employment not specifically excluded from the definition of wages or employment under Sec. 209 or 210 of the Act" is factored in.

https://secure.ssa.gov/apps10/poms.nsf/lnx/0302505005

Offhand, I don't see anything that excludes it. But maybe I'm missing it.

https://www.law.cornell.edu/uscode/text/42/409

https://www.law.cornell.edu/uscode/text/42/410

[New York Enrolled Agent]

Don't know for sure but the payments are excludable under section 131. Here is the SS list for the earnings test.

SSA Handbook ? 1811