Article: 50125

What Is Notice 2014-7? (IRS.gov)

Notice 2014-7 provides guidance on the federal income tax treatment of certain payments to individual care providers for the care of eligible individuals under a state Medicaid Home and Community-Based Services waiver program described in section 1915(c) of the Social Security Act (Medicaid Waiver payments).

Section 1915(c) enables individuals who otherwise would require care in a hospital, nursing facility, or intermediate care facility to receive care in the individual care provider’s home. The notice provides that the Service will treat these Medicaid waiver payments as difficulty of care payments excludable from gross income under § 131 of the Internal Revenue Code.

How to Enter Notice 2014-7 Information on 1040.com

You will add this information on the Other Miscellaneous Income screen. There is a box for “W-2 income excluded per Notice 2014-7”.

To add the form:

1. Go to the Federal taxes section.
2. Click on the Review tab on the left-hand side.
3. Select I’d like to see the forms I’ve filled out or search for a form .
4. In the search box, enter Other Miscellaneous Income.
   This is a distinct form from Form 1099-MISC. Make sure you are adding Other Miscellaneous Income.
5. Add and open the form.
6. Fill in the applicable information.
7. Click Save to apply changes.

Additional Information

For more information about Notice 2014-7 waivers, please see Notice 2014-7, as well as the IRS.gov article Certain Medicaid waiver payments may be excludable from income.