Page 1

COMBINED MEDICAID 500 Income Overview

Supersedes: CMA 500 (09/01/2025) Reference: ARM 37.82.101, .703 and .903; 42 CFR 435.601, .603; 20 CFR 416.1102 and .1103 Overview: MAGI (modified adjusted gross income) is used for all ACA Medicaid programs that have an income test. MAGI is an individual’s taxable income such as wages, dividends, capital gains, etc. minus any adjustments such as student loan interest deduction (max $2,500/year), pre-tax deductions taken out of wages (health insurance premiums, retirement plan contributions, or flexible spending accounts), self-employed health insurance deduction, tuition and fees (max $4,000/year), etc. When looking at the 1040 tax form, the income is listed on lines 7-22 and the adjustments are listed on lines 23-36. ACA: Whether income is earned or unearned does not change the budget; there are no income disregards or deductions under MAGI. NOTE: Self-employment expenses are not disregards or deductions; they are expenses associated with earning self- employment income and are allowed when determining countable net self-employment income. ABD: Gross income is always used except in cases of necessary for self-employment and for certain rental/lease income. INCOME DIVERTED: ABD: All income/money obligated to the household is considered available to the household, even if diverted to an outside entity. ACA: If the household pays taxes on the diverted income, it is countable. The household’s current and prospective circumstances are evaluated to determine financial eligibility. Income is divided into two categories: 1. Earned income that includes, but is not limited to: a. Wages and salaries, and

loading…

Page 1

Official source

COMBINED MEDICAID 500 Income Overview

Supersedes: CMA 500 (09/01/2025) Reference: ARM 37.82.101, .703 and .903; 42 CFR 435.601, .603; 20 CFR 416.1102 and .1103 Overview: MAGI (modified adjusted gross income) is used for all ACA Medicaid programs that have an income test. MAGI is an individual’s taxable income such as wages, dividends, capital gains, etc. minus any adjustments such as student loan interest deduction (max $2,500/year), pre-tax deductions taken out of wages (health insurance premiums, retirement plan contributions, or flexible spending accounts), self-employed health insurance deduction, tuition and fees (max $4,000/year), etc. When looking at the 1040 tax form, the income is listed on lines 7-22 and the adjustments are listed on lines 23-36. ACA: Whether income is earned or unearned does not change the budget; there are no income disregards or deductions under MAGI. NOTE: Self-employment expenses are not disregards or deductions; they are expenses associated with earning self- employment income and are allowed when determining countable net self-employment income. ABD: Gross income is always used except in cases of necessary for self-employment and for certain rental/lease income. INCOME DIVERTED: ABD: All income/money obligated to the household is considered available to the household, even if diverted to an outside entity. ACA: If the household pays taxes on the diverted income, it is countable. The household’s current and prospective circumstances are evaluated to determine financial eligibility. Income is divided into two categories: 1. Earned income that includes, but is not limited to: a. Wages and salaries, and