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Title 8: Medicaid Page 39 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Types of Non-MAGI-Related Income Revised April 11, 2025 Rent Reimbursement Payments Rent Reimbursement Payments 20 CFR 416.1102, 20 CFR 416.1103, 20 CFR 416.1123; P. L. 103-60 Payments received under the Department’s Rent Reimbursement Program under Iowa Code Chapter 425 are not considered income. These payments are considered a refund of money the client has already paid. The Department may also make rent reimbursement payments to residents of residential care facilities and nursing facilities. Do not consider the payments for either eligibility or client participation. Rental Property or Life Estate Income 20 CFR 416.1110(b), 20 CFR 416.1121(d) Count as unearned income the net income from a life estate, or rental of real property (including a homestead) unless the client has a business of renting properties. If the client is in the business of renting property, see Non- MAGI-Related Self-Employment Income.

If more than one person owns the property, count the income based on the ownership interest.

Use the most recent income tax return to determine net income from real property. Appropriate tax forms are:

 Schedule C, Profit or Loss Statement.

 Schedule E, Supplemental Income and Loss.

 Form 4562, Depreciation and Amortization.

 Form 1065, Partnership Return on Income.

Deduct from the gross income any necessary and reasonable expenses needed to produce the income. Examples of deductible expenses are real estate taxes, repairs and maintenance, the cost of advertising for tenants, and interest paid on a mortgage.

Do not deduct:

 The cost of capital equipment.

 Depreciation.  Any portion of a mortgage payment that is attributed to the principal.