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West Virginia Income Maintenance Manual Chapter 4

West Virginia Income Maintenance Manual Page 154 Chapter 4 Income

insurance premium. $550 - $35 = $515. The amount counted as income for MAGI Medicaid is $515 per week. Example 3: Kale is paid bi-weekly and has a gross pay of $1,300 per paycheck. She has two pre-tax deductions: $70 for her 401(k) contribution and $50 for her Flexible Spending Account (FSA). You start with the gross bi-weekly pay and subtract all pre-tax deductions. $1,300 - $70 - $50 = $1,180. The amount counted as income for MAGI Medicaid is $1,180 per bi-weekly paycheck. The Worker next adds all of the individual’s income from any of the income sources listed in “Countable Sources of Income” of Section 4.3, Chart 2 and exclude income listed in “Excluded Sources of Income” of Section 4.3, Chart 2. 4.7.2.B Step 2 – Make the Adjustments/Deductions After the income has been determined in Step 1, determine if any adjustments/deductions are applicable and subtract them from the income determined in Step 1. The Worker must incorporate allowable deductions (also known as adjustments) in the calculation of MAGI-based income. These adjustments/deductions can be found on page one of IRS form 1040. Different methodologies, as shown in the table below, may be used to incorporate different types of adjustments/deductions into the income determined in Step 1. Deduction Type Examples Deduction Methodology Consistent, monthly deduction • Alimony paid • Student loan interest • Deduct the monthly expense from current monthly income. Lump-sum deduction • Certain educator expenses • Certain moving expenses • Deduct the full amount of the expense from current monthly income in the month in which the expense was incurred. • Divide the total expense by 12 and deduct that amount from current monthly income. NOTE: Contributions to designed Roth 401(k)s and Roth IRAs are not pre-tax deductions, because they are made with after tax earnings.