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MISSISSIPPI DIVISION OF MEDICAID Eligibility Policy and Procedures Manual CHAPTER 200B – Income: MAGI Categories Page |145

Effective Month: July 2025

NOTE: Other deductions shown in this section are allowable for all MAGI applicants/recipients, but federal tax returns are not requested on individuals who do not receive self-employment income or income from partnerships and corporations. Tax returns may be used for these individuals if they choose, and the income/deductions reflected on the return are indicative of current circumstances. In addition, when these individuals report an ongoing allowable deduction, such as student loan interest, verification must be requested to verify the amount if the amount is questionable. The verification provided can include the tax return. Net Income for MAGI Purposes Adjusted gross income is shown on Form 1040, Line 11 and is the annual net income for self-employed individuals if self employment is their only household income. The annual net income can be used and entered in MEDS with annual frequency unless a change is anticipated. MEDS will determine the monthly amount.

200B.03.04B ENTERING NET INCOME IN MEDS The MAGI application form asks if each applying household member has allowable tax deductions, such as alimony, student loan interest or other allowable deductions. The “other” deductions are meant to include the types of IRS allowed deductions shown in the Adjustments to Income Section of the 1040, Schedule 1. These deductions are entered in MEDS as “MAGI-only deductions” in the drop-down box in the Financial tab, as described below. Net income from self-employment that is entered into MEDS is the total annual income less total annual expenses. The amount from the tax return can be entered with an annual frequency and MEDS will calculate the monthly amount. Do not enter the self- employment tax or the self-employment insurance deductions as “other” expenses in the “MAGI-only deductions” drop down box because they have already been allowed. Allowable deductions that are claimed on the MAGI application and entered in the “MAGI-only deductions” drop down box include the following: • Alimony paid – limited to divorces finalized on/before 12/31/2018. • Student loan interest • “Other” expenses, which include: o Educator expenses