Page 28

Manual Title Chapter Page Revision Date Virginia Medical Assistance Eligibility M04 July 2021 Subchapter Subject Page ending with Page M04 MODIFIED ADJUSTED GROSS INCOME (MAGI) M0440.100 19

C. Steps for Calculating MAGI For tax filers whose income is verified in the Hub as being reasonably compatible, no MAGI calculation is required. For non-filers or any other individuals whose income cannot be verified by the Hub, use the following steps for calculating an individual’s MAGI. Subtract or include any deductions listed below as reported by the individual.

Adjusted Gross Income (AGI) Include: • Wages, salaries, tips, etc. • Taxable interest • Taxable amount of pension, annuity or Individual Retirement Account (IRA) distributions and Social Security benefits • Business Income, farm income, capital gain, other gains (or loss) • Unemployment Compensation • Ordinary dividends • Rental real estate, royalties, partnerships • S corporations, trusts, etc. • Taxable refunds, credits, or offset of state and local income taxes • Other income Deduct: • Certain self-employment expenses • Student loan interest deduction • Educator expenses • IRA deduction • Moving expenses • Penalty on early withdrawal of savings • Health savings account deduction • Domestic production activities deduction • Certain business expenses of reservists, performing artists, and fee-basis government officials • Alimony paid prior to January 1, 2019 (but not child support paid) • For tax filers who do not itemize and report the deduction, up to $300 in charitable contributions made by an eligible individual in tax years beginning in 2020. Do Not Include: Veteran’s disability payments, Worker’s Compensation or child support received. Pre-tax contributions, such as those for child care, commuting, employer-sponsored health insurance, flexible spending accounts and retirement plans such as 401(k) and 403(b), are not included in AGI but are not listed above because they are already subtracted out of W-2 wages and salaries, amounts that an employer paid in 2020 for an employee’s student loan principal and interest. Note: Check the IRS website for detailed requirements for the income and deduction categories above. Add (+) back certain income • Non-taxable Social Security benefits • Tax –exempt interest • Foreign earned income and housing expenses for Americans living abroad Exclude (-)from income • Social Security benefits received by a child are not countable for his eligibility when a parent is in the household, unless the child is required to file taxes. • Scholarships, awards, or fellowship grants used for education purposes and not for living expenses • Certain American Indian and Alaska Native income derived from distributions, payments, ownership interests, real property usage rights and student financial assistance • Gifts, inheritances, and proceeds from life insurance • An amount received as a lump sum is counted only in the month received. • Parsonage allowance • Effective January 1, 2019, student loan debt forgiven due to death or disability of student is not counted as income. • Grants for homes designed for wheelchair living and motor vehicles for veterans who lost their sight or the use of their limbs • Difficulty of Care Payments • General Welfare Payments for Indian Tribes • Kinship Guardianship Payments • Pandemic Unemployment Compensation payments paid under the Federal Pandemic Unemployment Compensation Program. • COVID-19 relief payments provided under federal law