Page 12

E-135.1 Division of Welfare and Supportive Services MAGI BUDGETING Medical Assistance Manual Allowable Deductions 22 Jul 01 MTL 03/22

been no changes in circumstances use the annual figure divided by 12 to determine eligibility.

Examples of verification of annual vs. monthly income discrepancy would include; a tax return, seasonal work contract, statement from employer regarding temporary assignment, substitute teaching contract.

Certain tax deductions allowed by the IRS are not included in MAGI budgeting. If an individual lists deduction under “OTHER” on the application, verify the deduction type before allowing the deduction in the budget.

Allowable pre-tax deductions taken from earned income are used in the current monthly income budget. Pre-tax deductions must be clearly designated on the employee’s paystub or W-2 forms showing both the total gross earnings and the adjusted taxable gross earnings.

The deductions listed below are only allowable when they belong to someone in the tax filing unit or in the household (for non-filers).

Pre-tax deductions may include but are not limited to:

Deduction Type Explanation of Allowable Deduction Maximum Amount Commuter Expenses Employer provided qualified transportation fringe benefit such as:

• Transportation in a commuter highway vehicle (such as a van that seats at least 6) between your home and workplace.

• A transit pass (any pass, token, farecard, voucher, or similar item entitling a person to ride mass transit (whether public or private)

• Qualified parking provided to an employee at or near the employer’s place of business. Includes parking provided on or near a location from which the employee commutes to work by mass transit, in a commuter highway vehicle, or by carpool.

Expenses reimbursed under a bona fide reimbursement arrangement. Up to $270/month

Up to $270/month

Up to $270/month