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Title 8: Medicaid Page 64 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Non-MAGI-Related Deductions Revised April 11, 2025 $20 General Income Deduction Non-MAGI-Related Deductions Legal reference: 20 CFR 416.1112, 20 CFR 416.1124 After determining countable nonexcludable income, apply the following deductions (except as noted) in the order listed. Some deductions do not apply for all coverage groups and all income types. See the corresponding subsection for a complete explanation of when to apply the deduction. 1. From unearned income, subtract a general income deduction of up to $20. See $20 General Income Deduction. 2. From earned income, subtract any remaining balance of the $20 general income deduction that was not used for unearned income. See $20 General Income Deduction. 3. From earned income, subtract a work expense deduction of $65. See $65 Plus One- Half Deduction. 4. From earned income, subtract any impairment-related work expenses. See Deduction for Impairment-Related Work Expenses. 5. From remaining earned income (after the $65 deduction), subtract one-half. See $65 Plus One-Half Deduction. 6. From earned income, subtract any work expenses of the blind. See Deduction for Work Expenses for the Blind. 7. From earned or unearned income, subtract any income that is to be used for the Plan for Achieving Self Support. See Deduction for Plan for Achieving Self-Support. $20 General Income Deduction Legal reference: 20 CFR 416.1124(c)(12) and 20 CFR 416.1112(c)(4) When determining eligibility for SSI-related programs, allow a $20 general income deduction per eligible unit, except as listed below. Apply the deduction first to unearned income, then to earned income if unearned income is less than $20.

Mr. and Mrs. W live at home with total unearned income of $800. Countable income is: $800 - $20 deduction = $780 countable income