Idaho State Tax Commission

Idaho State Tax Commission

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Treatment of Medicaid Waiver Payments

In January, 2014, the Internal Revenue Service issued Internal Revenue Bulletin 2014-4 and Notice 2014-7 regarding the treatment of income from qualified foster care payments, Medicaid waiver payments, and difficulty of care payments under IRC § 131. As the bulletin and notice explains, such payments are excludable from income for federal income tax purposes when certain conditions apply.  

Because Idaho follows federal law in calculating adjusted gross income, Idaho will also exclude such payments as prescribed in the bulletin and notice from calculations of Idaho taxable income. No additions will be required on Schedule 39R or Schedule 39NR to add back the income excluded on the federal return. 

Individuals amending their federal return as a result of this bulletin may also amend their state return.  To ensure proper filing of the amended return, include a copy of the federal amended return along with an explanation for the amendment.

Posted 04-04-2014

The information on this site is for general guidance only. Tax laws are complex and change regularly. We can't cover every circumstance in our website guides. This guidance may not apply to your situation. Please contact us with any questions. We work to provide current and accurate information on our website. But some information could have technical inaccuracies or typographical errors. If there's a conflict between current tax law and the information on our website, current tax law will govern.