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MAGI-Based Medicaid Eligibility Rules Income Source Treatment of Income Self-employment income Counted with deductions for most expenses, depreciation, and business losses Salary deferrals (flexible spending, cafeteria and 401(k) plans) Not counted Child support received Not counted Alimony paid Alimony payments under separation or divorce agreements finalized after December 31, 2018 are not deductible by the payer. Alimony payments under separation or divorce agreement finalized on or before December 31, 2018 continue to be deductible by the payer except when such agreement is modified and when such modification expressly states that alimony is not deductible to the payer or includible in the income of the recipient Veterans’ benefits Not counted Workers’ compensation Not counted Gifts and inheritances Not counted TANF and SSI Not counted Qualified Lump Sum Income Winnings less than eighty thousand dollars ($80,000) are