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Chapter: 1800 Income Program: MFAM 1 1830.0000 Family-Related Medicaid This chapter discusses policy for individuals whose income must be considered when completing a Family-Related Medicaid eligibility determination. Modified Adjusted Gross Income (MAGI) is an Internal Revenue Service (IRS) method for counting income that aligns financial eligibility across all Insurance Affordability Programs (IAP). Adjusted Gross Income (AGI) is gross income minus casualty losses, charitable contributions, medical and dental expenses, qualified retirement contributions and other miscellaneous itemized deductions. MAGI is equal to Adjusted Gross Income plus foreign earned income, employer contribution plans, and tax exempt interest accrued during the taxable year. Current point in time income will be used in the eligibility determination process when available. 1830.0101 Income (MFAM) Income is money received from any source such as wages, benefits, contributions, and rentals. If income is taxable, it is counted.

MAGI-based budget determination requires deduction of income for pretax expenses.

Taxable Earned income is the receipt of wages, salary, commission, or profit from an individual's performance of work or services or a self-employment enterprise.

Taxable Unearned income is income for which there is no performance of work or services. Taxable unearned income may include:

1. retirement, disability payments, unemployment compensation; 2. annuities, pensions, and other regular payments; 3. alimony and spousal support payments with decrees issued prior to January 01, 2019; 4. dividends, interest, and royalties; 5. prizes and awards; or 6. Social Security income.

Excluded income is income (earned or unearned) that is not counted when determining eligibility.

Pretax Income Exclusions Pretax income is excluded from gross income before taxes are deducted. Examples of “pretax income exclusions” include but not limited to:

1. Some retirement plans (IRAs and 401(k) plan types) 2. Life Insurance 3. Health Insurance Premiums 4. Transportation programs 5. Health Savings accounts and Flexible spending accounts

Convert all pretax income exclusion amounts on the paystub/verification to a monthly amount (refer to Appendix A-37 for annual pretax income exclusion limits). Failure to deduct all pretax income exclusions will result in an incorrect calculation of income.

Note: An individual does not have to file a tax return to get pretax income excluded in a MAGI budget. 1830.0112 Payments to Joint Owners (MFAM) Payment to joint owners is one payment made on behalf of two or more individuals.