MAGI Income Methodologies 510-05-55-85-13

(Revised 10/1/13 ML #3390)

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Effective for the benefit month of January, 2014, the following MAGI Income Methodologies will be used in determining income eligibility for the Medicaid Program MAGI groups of Parents, Caretaker Relatives and their Spouses, Pregnant Women, Children, and the Expansion group. For benefit months prior to January 2014, please see the appropriate section under “Income” at 510-05-85-05.

  1. Income is based on household composition and tax filer rules.
  2. Monthly income is used prospectively.
  3. Current, point in time income is used—prospecting reasonable expected changes.
  4. A tax dependent child’s income does not count in a taxpayer parent’s or caretaker’s household if the child is not required to file a tax return. The child’s needs are included in the taxpayer’s household.
  1. If the taxpayer parent or taxpayer caretaker is in the child’s Medicaid household, the child’s income does not count in the child’s household, either.
  2. If the taxpayer parent or taxpayer caretaker is not in the child’s Medicaid household, the child’s income DOES count in the child’s household. For example, the child is in (non-IV-E) foster care or receiving HCBS services in a specialized facility.
  3. Filing requirements change every year and this information may be found in the instructions for Form 1040 at http://www.irs.gov/.
  4. If the child is not required to file a tax return, however, files a return in order to get a refund of taxes withheld, that child’s income is not counted in either the tax-filer’s or the child’s household.
  5. If the child IS required to file a tax return, the child’s income is counted in all the households in which the child is included.
  1. If using an individual’s federal tax return:

MAGI Income is:

MAGI = Adjusted Gross Income (AGI) plus:

  1. Any foreign earned income excluded from taxes
  2. Tax-exempt interest
  3. Tax-exempt Social Security income

 

Minus:

  1. Scholarships, awards, or fellowship grants used for education purposes and not for living expenses are excluded from income.
  2. Certain distributions, payments and student financial assistance for American Indians/Alaska Natives are excluded from income.

This MUST be updated using current data.

 

  1. If not using an individual’s federal tax return:

MAGI Income is:

  1. Gross taxable wages (must deduct pre-tax deductions) plus
  2. Gross Interest income plus
  3. Gross Dividend income plus
  4. Taxable refunds of state or local income taxes plus
  5. Gross Alimony received plus
  6. Net Business income or loss from self-employment plus
  7. Capital Gains or losses plus
  8. Taxable amounts of IRA distributions plus
  9. Taxable Amount of Pensions and annuities plus
  10. Net rents, royalties, partnerships, S corporation or trust income plus
  11. k. Net farm income or loss plus
  12. Gross unemployment compensation plus
  13. Gross Social Security income plus
  14. Gross foreign earned income plus
  15. Other income

 

Minus:

  1. Educator expenses
  2. Business expenses of reservist, performing artists and fee-basis government officials
  3. Health savings account deduction
  4. Moving expenses
  5. Deductible portion of self-employment tax
  6. Contributions to Self-employed SEP, SIMPLE and qualified plans
  7. Self-employed health insurance deduction
  8. h. Penalty on early withdrawal of savings
  9. Alimony paid
  10. Contributions to IRA
  11. Student loan interest deduction
  12. Tuition and fee
  13. Domestic production activities deduction
  14. Scholarships, awards, or fellowship grants used for education purposes and not for living expenses
  15. Certain distributions, payments and student financial assistance for American Indians/Alaska Natives.
  1. The following income types are not reported on Form 1040 and are not countable income under MAGI methodologies:
  1. Child support income
  2. Veteran’s benefits (aid and attendance, homebound benefits and reimbursements for unusual medical expenses)
  3. SSI income
  1. Instead of itemized disregards and deductions, a standard disregard equal to 5% of the Federal Poverty Level is allowed under MAGI Methodology.

 

 

 

 

 

 

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