Effective Date: November 1, 2021

No Previous Policy

A. General Income Requirements

Income rules to determine eligibility for CHIP using the MAGI-based methodology will follow federal tax rules with a few specific differences. MAGI-based income is a method of calculating a "modified adjusted gross income" amount based on federal tax rules, and certain "add-backs" and exclusions specific to CHIP.

An applicant or recipient is not required to provide a tax return to the agency to determine the MAGI-based income. There is no requirement for the person to even file a tax return. Rather the CHIP agency must use the tax rules to determine what income to count and what deductions to allow.

MAGI-based income will be calculated for each individual who is applying for or renewing eligibility for CHIP.

1. In general, the countable income for an individual is the sum of the MAGI-based income of every person included in the individual's household if that person's income is required to be counted.

2. MAGI-based income means "modified adjusted gross income" of an individual, which is the person's gross taxable income minus certain deductions, plus certain "add-backs" (the "Modified" part of MAGI.) The "add-backs" are:

o any untaxed portion of Social Security Benefits (any portion that is taxable is included in the adjusted gross income shown on a person's tax form),

o tax-free interest income, and

o foreign earned income even if it was not taxable.

3. The deductions from gross income are those allowed under tax rules as shown on the front page of the IRS Form 1040-Individual Tax Payer's Return.

4. The eligibility agency will calculate a monthly MAGI-based income that will account for reasonably expected income fluctuations or changes that will occur during the certification period.

The following subsections define the MAGI-based methodology of determining income.