Page 625
West Virginia Income Maintenance Manual Chapter 4
West Virginia Income Maintenance Manual Page 153 Chapter 4 Income
• Non-taxable Social Security benefits • Tax-exempt interest • Foreign earned income To calculate the MAGI, determine the adjusted gross income amount for each member of the MAGI household whose income will count, for the current month. The MAGI differs from the adjusted gross income, because MAGI accounts for additions and adjustments. The Worker uses the budgeting method established in Section 4.6.1, Budgeting Method, to anticipate future income amounts, consider past income sources, and build monthly income amounts based upon the applicant’s reported income. 4.7.2.A Step 1 – Determine the Income Taxable income is the portion of your gross income that is subject to federal, state, and local taxes. The calculation starts with your total annual earnings and then subtracts any eligible deductions to arrive at the final taxable amount. In some situations, pre-tax deductions must also be deducted from MAGI gross income. Pre-tax deductions are taken from an employee’s paycheck before any taxes are withheld. Pre-tax deductions can be tax-deferred or tax-exempt amounts that are deducted from the gross amount shown on an individual’s pay stub but will not be shown on the W-2 or IRS form 1040. When an individual has a pre-tax deduction, federally taxable wages will be less than gross wages on the pay stub. Pre-tax deductions include, but are not limited to: • Premiums for health, dental, vision and life insurance • Contributions to flexible spending accounts and health savings accounts • Contributions to certain 410 (k) and other retirement accounts • Short-term disability insurance Example 1: Rosebud’s pay stub shows weekly earnings of $400, and a tax- deferred 401K contribution of $24 per week. You start with the gross weekly pay and subtract the tax-deferred 401K contribution. $400 - $24 = $376. The amount counted as income for MAGI Medicaid is $376 per week. Example 2: Elmer’s pay stub shows a weekly salary of $550. His employer automatically deducts a pre-tax amount of $35 for his health insurance premium. You start with the gross weekly pay and subtract the non-taxable health NOTE: Supplemental Security Income (SSI) is never counted in MAGI.