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Title 8: Medicaid Page 10 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Income Policies for Non-MAGI-Related Coverage… Revised May 22, 2026 Deeming Non-MAGI-Related Income When deeming income from an ineligible parent or the spouse of an ineligible parent to a child: 1. Verify the ineligible person’s unearned income. Subtract from the ineligible person’s unearned income an allocation for each ineligible child. The allocation is $497 (the difference between the payment standard for a couple and the payment standard for one person), minus the child’s income. 2. Subtract the $20 general income deduction from the unearned income. 3. Verify the ineligible person’s earned income. Subtract from the ineligible person’s earned income any remaining portion of the ineligible child’s allocation that was not used to offset the ineligible person’s unearned income. 4. Subtract from the earned income any balance of the $20 general income deduction that was not used to offset the unearned income. 5. Subtract the $65 standard work expense deduction and one-half of the remainder from the balance. 6. Combine the remaining earned income with the remaining unearned income. 7. Subtract an allocation for the ineligible parents or stepparent in the household. The remaining amount is the income available for deeming to the child. For one ineligible parent, the allocation is equal to the SSI payment standard for one person. For two ineligible parents or an ineligible parent with a spouse, the allocation is equal to the SSI payment standard for a couple. 8. Treat the income as unearned income for the child and, if applicable to the coverage group being examined, apply the $20 general income deduction. 9. Add any remaining countable earned income of the child. 10. Compare this amount with the payment standard for an individual to determine eligibility for the child. NOTE: If there is more than one applicant child in the household, divide the parental income to be deemed equally among the children.