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MEDICAL MEDICAL MEDICAL MEDICAL MEDICAL MEDICAL MEDICAL APPENDIX H Division of Welfare and Supportive Services DETERMINING COUNTABLE

Medical Assistance Manual RSDI FOR MAGI BUDGETING 17 Jul 01 MTL 04/17

WORKSHEET 1 – INSTRUCTIONS (see IRS Publication 915)

How Much RSDI / RRB Is Taxable and countable in MAGI budgeting? If part of the RSDI / RRB benefits are potentially taxable after completing worksheet A, how much is countable depends on the total amount of benefits and other income.

Maximum taxable part: A maximum of 50% of the total RSDI / RRB benefits could be taxable. Individuals meeting the specific situations below may have up to 85% RSDI / RRB as taxable:

- The total of one-half of the RSDI / RRB benefits and all other income is more than $34,000 ($44,000 if married filing jointly); or

- Married filing separately and lived with spouse at any time during tax year.

Worksheet 1 may not apply to all individuals: Worksheet 1 can be used to figure the actual taxable RSDI / RRB benefits. In addition, there are other forms available to applicants in determining taxable RSDI / RRB. These include:

- IRS Form 1040 or 1040A instructions: The instruction booklets for either form have a worksheet included that can calculate the taxability of RSDI / RRB benefits.

- Appendix B of IRS Publication 590-A: This form maybe used to figure IRA deductions and taxable RSDI benefits.

- Worksheets 2, 3 and 4 of IRS Publication 915: These forms are used when a lump-sum payment of RSDI / RRB is received for an earlier tax year and included in the annualized total. Example: RSDI approved retroactively to October 2016 but payment was issued as a lump- sum in February 2017.