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Page 24 – CMCS Informational Bulletin Official Letter #19-003.56 Under section 70102, the single filing threshold (under age 65 and not blind) is $15,750 for tax year 2025, increased from $14,600 in 2024.57 This may result in an increase to the filing threshold of a dependent, which could affect whether the dependent’s MAGI is included in household income. Starting with tax year 2026, the Internal Revenue Service (IRS) will resume adjusting the filing thresholds for inflation. Certain changes in the law make earlier time-limited tax law changes permanent, with minor modifications. In particular, section 70113 makes permanent the elimination of the qualified moving expenses deduction. Active-duty members of the U.S. Armed Forces are already excepted from the elimination of the qualified moving expense deduction, and section 70113 adds, starting in 2026, members of the intelligence community to those who are excepted from the elimination. Additionally, section 70119 permanently extends the income exclusion for student debt discharged on account of the death or total disability of the student. (The moving expense and student debt-related changes, when first made temporary, were described by CMS in State Health Official Letter #19-003.) The WFTC legislation also makes significant changes to federal tax law for individual taxpayers that do not affect MAGI-based methodologies for Medicaid and CHIP. In particular, section 70201, related to a deduction for qualified tips; section 70202, related to deduction for overtime premium pay; and section 70203, related to a deduction for loan interest on certain passenger vehicles each are deductions that occur after the calculation of adjusted gross income. As a result, these deductions are not part of the MAGI calculation and do not impact an individual’s household MAGI. CMS continues to analyze other changes made to the federal tax law in WFTC legislation and is available to provide technical assistance to states. These changes to federal tax law as they affect MAGI-based methodologies are applicable to all states, the District of Columbia, and the territories. Closing Medicaid and CHIP are critical components of our nation’s health care safety net, serving as essential state-federal partnerships that provide coverage to millions of Americans. The successful implementation of the WFTC legislation will require coordinated efforts between CMS, state Medicaid and CHIP agencies, and other key stakeholders to ensure these programs continue to effectively serve our most vulnerable populations while implementing necessary reforms to eliminate waste, fraud, and abuse. CMS recognizes that the provisions of this law represent significant programmatic changes that will require substantial planning, coordination, and resources at both the federal and state levels. CMS is fully committed to providing comprehensive support to states throughout the 56 CMS State Health Official Letter #19-003, “Changes to Modified Adjusted Gross Income (MAGI)-based Income Methodologies,” pages 2-3, available at https://www.medicaid.gov/federal-policy-guidance/downloads/sho19003.pdf. 57 IRS Publication 501 discusses tax filing requirements in more detail. https://www.irs.gov/pub/irs-pdf/p501.pdf.