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Families and Children Manual Policy Manual Number: 010.020 Section: Financial Eligibility Chapter: Countable and Excluded Income

September 1, 2026 Division of Tenncare 20 5. Medicaid Exceptions to the MAGI Methodology MAGI-based income for TennCare Medicaid and CoverKids uses the same financial methodologies defined in section 36B(d)(2)(B) of the Code (which defines countable income as taxable income), with the following 3 exceptions: a. Amounts received as lump sums are counted as income only in the month received;

b. Scholarships, awards or fellowship grants used for education purposes and not for living expenses are excluded; and

c. All of following American Indian/Alaska Native related income is excluded:

i. Distributions from Alaska Native Corporations and Settlement Trusts. ii. Distributions from any property held in trust, subject to federal restrictions, located within the most recent boundaries of a prior federal reservation, or otherwise under the supervision of the Secretary of the Interior. iii. Distributions and payments from rents, leases, rights of way, royalties, usage rights or natural resource extraction and harvest from: 2. Rights of ownership or possession in any lands described in paragraph (5)(c)(ii) of this section; or 3. Federally protected rights regarding off-reservation hunting, fishing, gathering or usage of natural resources. iv. Distributions resulting from real property ownership interests related to natural resources and improvements: 1. Located on or near a reservation or within the most recent boundaries of a prior reservation; or 2. Resulting from the exercise of federally-protected rights relating to such real property ownership interests. v. Payments resulting from ownership interests in or usage rights to items that have unique religious, spiritual, traditional or cultural significance or rights that support subsistence or a traditional lifestyle according to applicable Tribal law or custom. vi. Student financial assistance provided under the Bureau of Indian Affairs education programs.