Should I choose to include Medicaid waiver payments in my earned income?

You get to choose whether or not to include Medicaid waiver payments in your earned income. Your amount of earned income affects various credits, so choosing to include your Medicaid waiver payments in your earned income could benefit you by increasing your credits.

You can try both including and not including Medicaid waiver payments and see which one gives you the greater tax benefit. Choosing to include Medicaid waiver payments in earned income won't increase your taxable income.