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MISSISSIPPI DIVISION OF MEDICAID Eligibility Policy and Procedures Manual CHAPTER 200B – Income: MAGI Categories Page |141

Effective Month: July 2025

PARTNERSHIPS – Partnerships are associations of 2 or more people. There are 3 types: 1. General Each partner jointly owns business. Each partner shares profits/losses. Each partner is liable for debts. Each partner’s income is self- employment (SE). 2. Limited Business is owned by at least 1 or more general partners who manage the business and are liable for the debts and 1 or more limited partners who have no liability for the debts. Each general partner’s income is self-employment. Each limited partner’s income is unearned income. If business is incorporated and limited partner performs services for business, earnings are wages, not SE. 3. Limited Liability (LLP) Business is set up like a general partnership, but each is granted limited liability for the other. Usually professionals, such as lawyers and physicians, etc. set up LLP’s. Each general partner’s income is self-employment. Each limited partner’s income is unearned income. If business is incorporated and limited partner performs services for business, earnings are wages, not SE.

Example –Partnership – A parent applying for her children works as an equal partner in a cleaning business. Based on federal tax returns from the prior tax year, profits were $57,000 and operating expenses were $9,500. The net earnings from the business equal $47,500. No change is anticipated for the current tax year. Each partner’s net earnings from self-employment is $23,750 divided over the period of time it is intended to cover, i.e., 12 months or $1,979.17 per month.

LIMITED LIABILITY COMPANY (LLC) This is a specific form of private limited company that combines the benefits of a partnership or If LLC files federal taxes as a partnership: • General partners income is SE