5710 MAGI MEDICAID HOUSEHOLD COMPOSITION

MAGI Medicaid household composition is determined for each individual in the household, based on federal tax rules. In most cases this consists of tax filers and their tax dependents. However, there will be exceptions for some households. The income that counts for each member of the household is also based on these rules.

MAGI households are determined in two different ways: Tax Filer Rules, and Non-Tax Filer rules. (See definitions below.)

A Tax Filer (TF) is any individual that files a tax return or can reasonably be expected to be required to file in the next year. (See Addendum 6 for tax filing requirements)

A Non-Filer (NF) is someone who does not file taxes or does not expect to be required to file a tax return in the next year. This includes individuals receiving SSI or individuals who do not make a certain level of income (which varies based on age, marital status and type of income the individual receives). (See Addendum 6 for tax filing requirements)

A Tax Dependent (TD) is an individual supported by a tax filer for over half of a calendar year. Most often tax dependents are children, but sometimes a tax dependent is a spouse, a parent of the tax filer that is living in the house, or a non-related person.

5710-1 HOUSEHOLD COMPOSITION RELATED TO MAGI INCOME

Usually the tax household consists of parents and their dependent children (biological, adopted, or step); however, IRS rules allow that tax dependents can also be qualifying relatives and even nonrelatives. Extended family members and unrelated individuals claimed as tax dependents can be in the same MAGI Medicaid household. Non-Relative dependents may count for household size, but may not be covered by Medicaid unless they meet one of the available categories.

For MAGI purposes, parents and children means all biological, adoptive or step relationships. Therefore, step-parents will be included in the household with their spouse and stepchildren.

For all legally married couples who live together, each spouse is included in the household of the other spouse. This is true whether they expect to file a tax

return, file a joint tax return, or whether one spouse expects to be claimed as a tax dependent by the other spouse.

If a tax filer cannot verify that an individual is their tax dependent, household composition for that individual will be determined using the Non-Filer Rule.

A. Tax Filer Rules:

The following people are included in the household size if the tax filer is not also claimed as someone else’s dependent:

Tax filer; Tax filer’s spouse, if living with tax filer; and Any individual reasonably established to be a tax dependent of the tax

filer.

B. Tax Dependent Rules:

The following people are included in the household size of the tax dependent:

Tax dependent; Tax filer that claimed the dependent; Tax filer’s spouse, if living with the tax filer; Tax dependent’s spouse, if living with the tax dependent; and Any individual reasonably established to be a tax dependent of the tax

filer.

C. Non-Tax Filer Rules:

A household size is determined by the Non-Filer Rule if any of the following are true:

Individual is a tax dependent who is not the tax filer’s spouse or the tax filer’s child;

Individual is a tax dependent child who lives with both parents that do not file jointly and has been claimed as a tax dependent by 1 parent; or

Individual is a tax dependent child who has been claimed as a tax dependent by a non-custodial parent.

If an individual is a Non-Filer, the following household size is established:

Individual; Individual’s (biological, adoptive, or step) parents, if living with the

individual; and Individual’s (biological, adoptive, half or step) siblings (age <19), if living

with the individual; and, Individual’s spouse, if living with individual.

Note:

The household size for an individual claiming to be a parent or caretaker may not include dependent children. For example, an aunt claiming to be a caretaker relative and living with her niece or nephew will be a single person household if she does not claim them as tax dependents. If a tax-filer or applicant does not live with the dependent they are claiming, and have no dependent child in their household, they are not a “caretaker relative” and are not eligible for Medicaid under the caretaker relative category.

5710-2 CONSTRUCT A MAGI HOUSEHOLD FOR EACH APPLICANT

A. Does the individual expect to file taxes?i. If no – continue to step Bii. If yes – does the individual expect to be claimed as a tax dependent

by anyone else?1. If no - the household consists of the tax filer, a spouse living with

the tax filer, and all persons whom the tax filer expects to claim as a tax dependent

2. If yes – continue to step BB. Does the individual expect to be claimed as a tax dependent?

i. If no – continue to step Cii. If yes – does the individual meet any of the following exceptions?

The individual expects to be claimed as a tax dependent of someone other than a spouse or a biological, adoptive, or step parent.

The individual is a child (under age 19) living with both parents, but the parents do not expect to file a joint tax return.

The individual is a child (under age 19) who expects to be claimed by a non-custodial parent.1. If no – the household is the household of the tax filer

claiming her/him as a tax dependent Is the individual married? If yes - the household also

includes the individual’s spouse2. If yes – continue to step C

C. For individuals who neither expect to file a tax return nor expect to be claimed as a tax dependent, as well as tax dependents who meet one of the exceptions in B.ii., the household consists of the individual and, if living with the individual--

The individual's spouse; The individual's natural, adopted and step children under

the age 19;

In the case of individuals under age 19, the individual's natural, adoptive and step parents and natural, adoptive and step siblings under age 19.

TAX FILER HOUSEHOLD COMPOSITIONCHART A

CHART A

Does the individual expect to be required to

file taxes

No

GO TO CHART B

Yes

Does the Individual expect to be claimed as a tax dependent by

anyone else?

NO

HH consists of the tax filer, spouse living with the tax filer or filing jointly,

and all persons whom the tax filer expects to claim as a tax dependent

YES

CONTINUE TO CHART B

TAX DEPENDENT HOUSEHOLD COMPOSITIONCHART B

CHART B

Does the Individual expect to be claimed as a tax dependent?

Yes

Does the individual meet any of these exceptions:The individual expects to be claimed as a tax dependent of someone other than a spouse orr a biological, adoptive, or

step parent.OR

The individual is a child (under age 19) living with both parents, but the parents do not expect to file a joint tax return.

OR

The individual is a child (under age 19) who expects to be claimed by a non-custodial parent

Yes

Continue to Chart C

No

HH is the HH of the tax filer claiming him/her as a dependent.

Is the individual married?

Yes

The HH also includes the individual's spouse

No

Continue to CHART C

NON-FILER HOUSEHOLD COMPOSITIONCHART C

Chart C

Individuals who neither expect to file a tax return nor expect to be claimed as a tax dependent

ORTax Dependents who meet one of the exceptions on Chart

B

HH consists of the individual, and if living with the individual the

following:

The individual's spouse

The natural, adopted and step children

under age 19If the individual is under age 19, the

individual's natural, adoptive and step parents and any

natural, adoptive and step siblings under

age 19

5710-3 DETERMINING COUNTABLE INCOME FOR EACH MEMBER USING MAGI RULES

Determining whose income will affect each person’s eligibility for MAGI Medicaid is based on household composition and filing status and is very similar to the household composition rules described above.

A. For tax filers, count the income of the tax filer, the spouse of the tax filer, and all persons who the tax filer expects to claim as a tax dependent if the tax dependent’s income is higher than the tax filing threshold. See Chart A. below.

B. For tax dependents, count the income of the tax filer claiming the individual as a tax dependent, the spouse of the individual if they are living together, and the tax dependent’s income if the dependent’s income is higher than the tax filing threshold. See Chart B. below.

C. For individuals who are not expected to be required to file a tax return and tax dependents who meet one of the three exceptions listed below, follow the income counting rules for non-filers. See Chart C. below.

The three tax dependent exceptions are as follows:

The individual expects to be claimed as a tax dependent of someone other than a spouse or parent;

The individual is a child under age 19 living with both parents, but the parents do not expect to file a joint return; or

The individual is a child under age 19 who expects to be claimed by a non-custodial parent.

TAX FILER - WHOSE INCOME IS COUNTEDCHART A

CHART AIncome Counting Rules

for Tax Filers

Does the individual expect to be required to file taxes?

Yes

Does the individual expect to be claimed as a tax

dependent?

Yes

Go to Chart B

No

Count the income of the tax filer, a spouse, if filing jointly (whether the tax filer adn spouse live together or not) and

all persons who the tax filer expects to claim as a tax dependent. Do not count the income of a tax dependent

unless that income is over the tax filing threshold. For 2015 the thresholds are $6300 earned income, $1050 unearned

income, or a combination of $5950 earned plus $350 uneraned.

No

Go to Chart B

TAX DEPENDENT - WHOSE INCOME IS COUNTED CHART B

CHART BIncome Counting Rules for Tax Dependent

Does the individual expect to be claimed as a tax dependent?

Yes

Does the Individual meet any of the following

exceptions?

The individual expects to be claimed as a tax dependent of someone other than a spouse or a biological, adoptive, or step parent

orThe individual is a child under age 19 living with both parents, but the parents do not

expect to file a joint returnor

The individual is a child under age 19 who expects to be claimed by a non-custodial parent

Yes

Go to Chart C

No

Count the income of a tax filer, the tax filer's spouse if filing jointly (whether the tax filer adn spouse live together or not), and all persons who the tax filer

expects to claim as a tax dependent. Do not count the income of a tax dependent unless that income is over the tax filing threshold. For 2015 the thresholds are $6300 earned income, $1050 unearned income, or a combination of $5950 earned plus $350 uneraned.

Count the income of the tax filer claiming him/her as a dependent.

Is the individual married?

If yes, count the income of the individual's spouse if they are living together

No

Go to Chart C

NON-FILER - WHOSE INCOME IS COUNTED CHART C

Chart CIncome Counting Rules for Non-filers

and Tax Dependents that meet one or more

exceptions in Chart B

Count the income of the individual and of the following persons living with the individual:

(See MS 5715-3 for excluded income types)

The individual's spouse

The individual's natural, adoptive and step children under

the age of 19

If the individual is under age 19 - the individual's natural, adoptive and step parents and natural, adoptive and step siblings under age 19. Do not count the income of a tax dependent unless that income is over the tax filing threshold.

For 2015 the thresholds are $6300 earned income, $1050 unearned

income, or a combination of $5950 earned plus $350 unearned.

5710-4 EXAMPLES OF INCOME COUNTING FOR MAGI-BASED HOUSEHOLD COMPOSITIONS

Household Example #1:

Lilly applies for Medicaid. She lives with her partner Bill and their common child, Bella age 1.

Lilly and Bill are both employed and expect to file taxes. Since they are not married, they will file separately. Bella is claimed as a dependent on Bill’s taxes.

Individual Explanations:

Lilly: As a tax filer, Lilly’s household is composed of herself only because Bella is Bill’s tax dependent (HH size 1, income counted $1238/mo)

Bill: As a tax filer, Bill’s household is composed of himself and Bella because she is his claimed tax dependent (HH size 2, income counted $860/mo)

Bella: Since Bella lives with both her natural parent. (HH size is 3 and BOTH parent’s income count, income counted $2098/mo)

Determining MAGI Household Size

Household members Rule Eligibility

Category Lilly Bill Bella

Lilly Tax Filer ParentCaretaker X

Bill Tax Filer ParentCaretaker X X

Bella

Non-Filer, because she

lives with both parents who do not file jointly

ChildrenUnder 19 X X X

Determining MAGI Household Income

Household

MembersIndividual

IncomeHousehold

Income Whose Income Counts for Whom?

Lilly $1238 $1238 Lilly$1238

Bill $860 $860 Bill$860

Bella$0

Bella $0 $2098 Lilly$1238

Bill$860

Bella$0

Household Example #2:

Paul has a 7 year old child with Shauna, to whom he was never married. Their child’s name is Liza. For the sake of Liza, Paul and Shauna live under the same roof, but Shauna later married Matt. Shauna also has another child from a previous marriage.

Paul is the father to Liza, and claims Liza on his taxes as his dependent.

Shauna is the mother to both Liza and 17 year old Natalie. Shauna is the spouse of Matt, making Matt a step-father to both children. Shauna files taxes jointly with her spouse.

Matt is the step-father to two children and spouse to Shauna, but has no children of his own. His income counts to his spouse and to his step children. Matt and Shauna claim Natalie as a dependent on their taxes.

Individual Explanations:

Paul: As a tax filer with a tax dependent child, Paul’s household is composed of himself and his daughter Liza. (HH size 2, income counted $1586/mo)

Liza: Is a “non-filer” because she is related to Paul and Shauna by birth, lives with both of them, but they do not file jointly, Liza’s household is composed of herself and all other household members including her step-father, Matt, since Matt and Shaunna are married. (HH size 5, income counted $3872/mo)

Shauna: Since she files jointly with her spouse, Matt and is the mother of both children in the household, Shauna’s household is composed of herself, her spouse Matt, and her daughter, Natalie, but not Liza since Liza is claimed by Paul. (HH size is 3, income counted $2286/mo)

Matt: Shauna’s spouse, and step-father to both children in the household Matt’s household is composed of himself, his spouse Shauna, and Shauna’s daughter Natalie, but not Liza since Liza is claimed by Paul. (HH size is 3, income counted $2286/mo)

Natalie: Natalie is Shauna’s daughter, Liza’s half-sister and Matt’s step-daughter. (HH size is 3, income counted $2286/mo)

Determining MAGI Household Size

Household members Rule Eligibility

Category Paul Liza Shauna Matt Natalie

Paul Tax Filer ParentCaretaker X X

Liza Non-Filer Children Under 19 X X X X X

ShaunaTax Filer(Jointly

with Matt)

ChildrenUnder 19 X X X

MattTax Filer(Jointly

with Shauna)

Caretaker Relative(Step-parent)

X X X

Natalie Tax Dependent

Children Under 19 X X X

Determining MAGI Household Income

Household

MembersIndividual Income

Household Income Whose Income Counts for Whom?

Paul $1586 $1586 Paul$1586

Liza$0

Liza $0 $3872 Paul$1586

Liza$0

Shauna$350

Matt$1936

Natalie$0

Shauna $350 $2286 Shauna$350

Matt$1936

Natalie$0

Matt $1936 $2286 Shauna$350

Matt$1936

Natalie$0

Natalie $0 $2286 Shauna$350

Matt$1936

Natalie$0

Household Example #3:

Aunt Betty lives with her own child, 6 year old Dan, and her nephew and niece, Jake, age 14 and Laurel, age 17. Jake and Laurel are being claimed as tax dependents on their mother’s taxes, but their mother lives in another state. Aunt Betty claims her child Dan as a dependent on her taxes.

Betty and Laurel both work. Laurel and Jake are siblings. Because Jake doesn’t live with his mother, we use non-filer rules to determine his Medicaid eligibility.

Individual Explanations:

Aunt Betty: As a tax filer, with a dependent child, Betty’s household is composed of herself and Dan (HH size 2, income counted $1586/mo)

Dan: as a tax dependent of his mother, Dan’s household is himself and his mother, Betty (HH size 2, income counted $1586/mo)

Jake: Jake meets the rule for a dependent child NOT residing with the parent who claims him as a dependent, so we use non-filer rules, and he and his child age sibling are counted in the same Medicaid Household (HH size 2, income counted $900/mo)

Laurel: Although Laurel is a tax filer, for Medicaid purposes she falls under the non-filer rules because she doesn’t live with the parent that claims her as a dependent. Laurel’s household is composed of herself and her brother Jake. (HH size 2, income counted $900/mo)

Determining MAGI Household Size

Household

membersRule Eligibility

CategoryBett

y Dan Jake Laurel

Aunt Betty Tax FilerParent

Caretaker/Caretaker Relative

X X

Dan Tax Dependent ChildrenUnder 19 X X

Jake Non-Filer ChildrenUnder 19 X X

Laurel

Non-Filer, although she expects to file

based on income, she meets the exception

because she is claimed as a

dependent of a parent with whom she

doesn’t live.

ChildrenUnder 19 X X

Determining MAGI Household Income

Household

MembersIndividual

IncomeHousehold Income Whose Income Counts for Whom?

Aunt Betty $1586 $1586 Betty$1586

Dan$0

Dan $0 $1586 Betty$1586

Dan$0

Jake $0 $900 Jake$0

Laurel$900

Laurel $900 $900 Jake$0

Laurel$900

Household Example #4:

Sofia lives with her 9 year old daughter, Monica. Monica is claimed as a dependent by her non-custodial father, James, who lives in another city.

Individual Explanations:

Sofia: Is employed and is a tax filer, she is not claimed on another person’s taxes as a dependent, and she doesn’t claim her daughter as a dependent. She lives with her 9 year old daughter Monica. Sofia’s household is composed of herself (HH size 1, income counted $1000/mo)

Monica: Is a tax dependent of her father, with whom she doesn’t live, so she falls under the non-filer rules since she meets the third exception under the non-filer rules (HH size 2. Income counted is her mother’s $1000/mo)

James: Although Monica is in his household size, James is ineligible for Medicaid for himself since he doesn’t have a qualifying dependent child living with him.

Determining MAGI Household Size

Household

membersRule Eligibility

Category Sofia Monica James

Sofia Tax Filer ParentCaretaker X

Monica Non-Filer ChildrenUnder 19 X X

James Tax FilerNone (not

a caretaker)

X X

Determining MAGI Household Income

Household

MembersIndividual

IncomeHousehold

IncomeWhose Income Counts for Whom?

Sofia $1000 $1000 Sofia$1000

Monica $0 $1000 Sofia$1000

Monica$0

James $2000 $2000 $0 James$2000

Household Example #5:

April applies for Medicaid. She lives with her children Deanna and Sam, twins, age 13. April’s only income is TANF; she doesn’t expect to have to file taxes since ATAP is not taxable income.

Individual Explanations:

April: Non-filer – we count all people related to her that live in her household (HH size 3, income of TANF is $800/mo)

Deanna: (HH size 3, income of TANF is $800/mo) Sam: (HH size 3, income of TANF is $800/mo)

Determining MAGI Household Size

Household members Rule Eligibility

Category April Deanna Sam

April Non-Filer ParentCaretaker X X X

Deanna Non-Filer Children Under 19 X X X

Sam Non-Filer ChildrenUnder 19 X X X

Determining MAGI Household Income

Household

MembersIndividual

IncomeHousehold

Income Whose Income Counts for Whom?

April $0 $0 April$0

Deanna$0

Sam$0

Deanna $0 $0 April$0

Deanna$0

Sam$0

Sam $0 $0 April$0

Deanna$0

Sam$0

Household Example #6:

Luci, her husband, Joe, and their 2 children, Sam and Dean apply for Medicaid. Joe receives SSI and works part time, Luci also works part time and receives a small ATAP benefit. They do file taxes jointly.

Individual Explanations:

Luci: Tax Filer – Luci’s household includes her husband and both children because she and Joe file jointly. Only Joe’s earnings affect her eligibility. The SSI and APA income do not. She works part time earning $800 per month and receives ATAP of $300 per month. (HH size 4, income is TANF is $300/mo and earnings of $800 per month)

Joe – Tax Filer – Joe is receiving SSI, APA and APA related Medicaid. He also works part time receiving gross income of $400 per month. (Joe’s earnings do affect the eligibility of the household, but he is not being determined eligible for MAGI Medicaid because he is receiving APA related Medicaid.)

Dean: (HH size 4) Sam: (HH size 4)

Determining MAGI Household Size

Household members Rule Eligibility

Category Luci Joe Dean Sam

Luci Tax Filer ParentCaretaker X X X X

Joe Tax Filer APA Related N/A N/A N/A N/A

Dean Tax Dependent

Children Under 19 X X X X

Sam Tax Dependent

ChildrenUnder 19 X X X X

Determining MAGI Household Income

Household Members

Individual Income

Household Income Whose Income Counts for Whom?

Luci $800 $1200 April$800

Joe$400

Dean$0

Sam$0

Joe $400 N/A N/A N/A N/A N/A

Dean $0 $1200 April$800

Joe$400

Dean$0

Sam$0

Sam $0 $1200 April$800

Joe$400

Dean$0

Sam$0