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Last Updated: 12/29/2016

Medicaid Home & Community-Based Services Waiver Program Payments

Internal Revenue Service (IRS) Notice 2014-7 provides that certain payments received by parents and other individual home care providers from a state Medicaid Home & Community-Based Services Waiver (Medicaid Waiver) Program are excluded from tax as difficulty of care foster care payments under Internal Revenue Code section 131.

How does this affect my Minnesota income tax return?

It only affects your Minnesota income tax return if you claim the K-12 Education Credit (M1ED) or Child and Dependent Care Credit (M1CD). You must add the payments  to your household income when calculating these credits.
 

Can I amend a prior year Minnesota return if I included these payments?

Yes. You can file a Minnesota amended return for  any year in which you timely file a federal amended return.
 

How does this affect my Homestead Credit Refund or Renter’s Property Tax Refund?

You must add the payments  to your household income on Form M1PR when filing for a Homestead Credit Refund or Renter’s Property Tax Refund.