Disregarded Income 510-03-85-30

(Revised 7/1/2025 ML 3935 )

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The following income types are not reported on Form 1040 and are not countable income under ACA Medicaid:

Non-taxable income other than: Non-taxable foreign earned income, Non-taxable interest or dividend income; The non-taxable portion of Social Security Benefits

Supplemental Security Benefits (SSI)

Veteran’s Administration Disability Benefits Aid and attendance payments, Homebound benefits Reimbursements for unusual medical expenses

Child support income.

Temporary Assistance for Needy Families (TANF) benefit and support services payments made by the Department or another state.

Workforce Safety and Insurance (WSI) Benefits.

Proceeds from life, accident or health insurance.

Federal tax credits,(i.e. Child Tax credit and IETC (Earned Income Tax Credit) and federal income tax refunds.).

Gifts and Loans.

Inheritances.

Child’s income (See section 510-03-85-13, ACA Income Methodologies regarding when to count a child’s income.)

Tribal General Assistance Payments.

Subsidized Guardianship Project payments

Educational scholarships, awards, and fellowship grants used for educational expenses do not count as income. Count only the portion of educational income that is used for living expenses or other non-educational related expenses.

Certain distributions, payments and student financial assistance for American Indians/Alaska Natives can only be disregarded if they were initially counted as taxable income.

Non-recurring and recurring lump sum payments of disregarded earned or unearned income Veteran’s Administration Aid and attendance payments, Veteran’s Administration Homebound benefits Veteran’s Administration Reimbursements for unusual medical expenses Veteran’s Administration Dependents Indemnity Compensation; Insurance settlements for destroyed exempt property; Death benefits Health or long-term care insurance payments; Life Insurance proceeds Accident Insurance proceeds

Voluntary cash contributions from others.

Proceeds from a loan agreement, including reverse mortgages. However, if the person lending the money receives interest, the interest received is income.

Hostile Fire Pay when an individual is on active military duty serving in a combat zone, the full amount of the person's military pay can be excluded from taxable income.

Deposits to a joint checking account made by a non-household member.

Money payments made by the Department, another state, or tribal entities in connection with the State LTC Subsidy program, foster care, subsidized guardianship, or the subsidized adoption program.

Benefits received through the Low Income Home Energy Assistance Program.

Refugee cash assistance or grant payments.

County general assistance that may be issued on an intermittent basis to cover emergency type situations.

Payments from the Child and Adult Food Program for meals and snacks to licensed families who provide day care in their home.

Payments from the family subsidy program.

Income received as a housing allowance by programs sponsored by the United States Department of Housing and Urban Development and rent supplements or utility payments provided through the Housing Assistance Program.

Money received by Indians from the lease or sale of natural resources, and rent or lease income, resulting from the exercise of federally-protected rights on excluded Indian property, is considered an asset conversion and is therefore not considered as income (even if the money is taken out of the IIM account in the same month it was deposited into the account). This includes distributions of per capita judgment funds or property earnings held in trust for a tribe. This does not include local Tribal funds that a Tribe distributes to individuals on a per capita basis, but which have not been held in trust by the Secretary of Interior (e.g., tribally managed gaming revenues - which is countable income).

Income derived from sub marginal lands, conveyed to Indian tribes and held in trust by the United States, as required by Pub. L. 94-114.

Compensation received by volunteers participating in the ACTION program as stipulated in the Domestic Volunteer Service Act of 1973, including the National Senior Volunteer Corps, including Retired Senior Volunteer Program (RSVP), Foster Grandparents, and Senior Companion Program; National Volunteer Programs to Assist Small Businesses and Promote Volunteer Services by Persons with Business Experience; Volunteers in Service to America (VISTA) (now AmeriCorps*VISTA, not to be confused with AmeriCorps, a separate program), VISTA Literary Corps.

Payments made to recipients under title II of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970.

All income, allowances, and bonuses received as a result of participation in the Job Corps Program.

Payments received for the repair or replacement of lost, damaged or stolen assets.

Homestead tax credits.

Training funds received from Vocational Rehabilitation.

Training allowances of up to thirty dollars per week provided through a tribal native employment works program, or the Job Opportunities and Basic Skills Training program.

Needs-based payments, support services, and relocation expenses provided through programs established under the Workforce Innovation and Opportunity Act (WIOA), and through the Job Opportunities and Basic Skills program.

Training stipends provided to victims of domestic violence by private, charitable organizations, such as the Seeds of Hope Gift Shop, or the Abused Adult Resource Center, for attending their educational programs.

Tax-exempt portions of payments made as a result of the Alaska Native Claims Settlement Act.

Payments to certain United States citizens of Japanese ancestry, resident Japanese non-citizens, and eligible Aleuts made under the Wartime Relocation of Civilians Reparations Act.

Agent Orange payments.

Crime Victims Reparation payments.

German reparation payments made to survivors of the holocaust, and reparation payments made under sections 500 through 506 of the Austrian General Social Insurance Act.

Assistance received under the Disaster Relief and Emergency Assistance Act of 1974 or some other federal statute, because of a presidentially declared major disaster (including disaster assistance unemployment compensation), and interest earned on that assistance. Comparable assistance received from a state or local government, or from a disaster assistance organization is also excluded.

Allowances paid to children of Vietnam veterans who are born with spina bifida, or to children of women Vietnam veterans who are born with certain covered birth defects.

Netherlands Reparation payments based on Nazi, but not Japanese, persecution during World War II, Public Law 103-286

Radiation Exposure Compensation, Public Law 101-426

The Medicare part B premium refunded by the Social Security Administration

Medicare Part D premiums, copayments, and deductibles refunded by prescription drug plans

Reimbursements from an employer, training agency, or other organization for past or future training, or volunteer related expenses are disregarded from income. Reimbursements must be specified for an identified expense, other than normal living expenses, and used for the purpose intended. Examples of disregarded reimbursements include: Reimbursements for job or training-related expenses such as travel, per diem, uniforms, and transportation to and from the job or training site Reimbursements for out-of-pocket expenses of volunteers incurred in the course of their work

The first $2,000 received by an individual age 19 and over as compensation for participation in a clinical trial for rare diseases or conditions meeting the requirements of Section 1612(b)(26) of the Act. This disregard is only allowed if approved by the Medicaid Eligibility Unit.

Monthly food coupons distributed to individuals age 55 and over from the Sisseton-Wahpeton Oyate Lake Traverse Reservation Food Distribution program.

Payments of flat rate insurance like a hospital plan that pays a daily rate to the client for each day in the hospital. These are usually referred to as an indemnity policy.

Any withdrawal made from a 529 plan is excluded as income if the funds are used for the intended purposes. If the funds are withdrawn and not used for their intended purpose, they become taxable income and must be counted.

Payments distributed by the Emergency Rent Assistance Program (ERAP).

Parent Mentor compensation of a parent or guardian of a Medicaid or CHIP eligible child who is 'trained to assist families with children who have no health insurance coverage with respect to improving the social determinants of the health of such child.

Alimony received when the alimony agreement is finalized or an existing alimony agreement is modified on or after January 1, 2019.

Discharged Student Loan Debt, normally included in MAGI-based income, for tax years 2018-2025 in cases of discharged debt on account of the death or permanent and total disability of a student. Debt is not included as income of the borrower.

Disbursements from The People’s Fund and General Disbursements to members of the Mandan, Hidatsa, Arikara (MHA) Nation also known as Three Affiliated Tribes (TAT) come from natural resources (oil and gas royalties), therefore are disregarded income.