Do I need to include my wife's W-2 if she only made 1,800 last year?

[rnochs1]

She paid in taxes but her work sent the taxes she paid in back to her because they said she didn't make enough money so I'm curious if that w-2 needs to be claimed

[PattiF]

Yes, you do need to include your wife's W-2 in your tax return. All income is required to be reported to the IRS. The wages will be entered in Box 1.

If the federal withholding was returned to your wife, there should not be an entry in Box 2 of the W-2.  Check to make sure that there isn't an amount in Box 2.

[xmasbaby0]

Every 2022 W-2 that you received must be reported on your 2022 tax return, even if they are for small amounts.  Remember that each one of those W-2’s has your Social Security number on it, and that income was reported to the IRS by the employer.  You do not want to get in trouble with the IRS for under-reporting your income.

ALL of your W-2’s must be entered on the SAME tax return.  

Go to Federal>Wages & Income to enter a W-2.

After you enter the first one, you click Add Another W-2.

[rnochs1]

Box 1 is the only one that has any amount in it and box 2 has 0.  The social security and Medicaid taxes she had withheld from every paycheck was sent back to her because she didn't make enough money so they included 0 in those boxes as well. That's why I was curious because I've never heard of a company reimbursing taxes that were asked to be taken out. 

[xmasbaby0]

So you enter the W-2 exactly as it appears.  She has taxable income in box 1 that has to be included on your joint return.

[rnochs1]

I appreciate it. I will add her W-2 on our return. Can I ask why an employer would send back taxes paid in instead of included it on a W-2 even if it's a small amount?

[xmasbaby0]

That was unusual----ask the employer.   There would not normally be a reason to take back the SS or Medicare.   Even teenagers with after school jobs pay SS and Medicare and do not get it back.

[VolvoGirl]

Is there something different about your wife?  Is she a US citizen?  She shouldn't be exempt from SS & Medicare.  Is the W2 for IHSS services?  Who is the employer?

[rnochs1]

Yeah, she is a US citizen and filled out tax papers before starting claiming 0 on dependents. The only explanation her employer gave her was that she didn't make enough and they owed her a refund. 

[rnochs1]

Yes she provides In-home services. It's through Integrity home care and hospice but it's direct to consumer services for Medicare recipients. Does that make a difference? 

[DawnC]

Yes, it does make a difference.   Certain Medicaid waiver payments are treated as difficulty-of-care payments when received by an individual care provider for care of an eligible individual (whether related or unrelated) living in their home.  These payments are excluded from gross income and shouldn't be included in your earned income.  Does the care recipient live with you and your wife in your home?   Please this Help article on this issue >>  Qualified Medicaid waiver payments on a W-2 show as earned income for EIC.

[rnochs1]

I appreciate your response. She works for my father who is disabled so it's not in our home. 

[DawnC]

In that case, the W-2 is correct.   Box 1 amount is subject to federal income tax.   Boxes 3 and 5 should be empty since she earned less than $2400 as your father's household employee.