Eligibility Online Manual
M905 Income Disregards/Deductions
Purpose: This section will provide information on Income Disregards and Deductions.
Current Policy Effective Date: January 1, 2019
Date Last Reviewed: August 22, 2019
Previous Policy: May 1, 2017
POL M905: INCOME DISREGARDS/DEDUCTIONS
1. Allow A 5% FPL Income Disregard For MAGI Programs When It Would Make A Difference In Eligibility.
2. Allow Tax Deductible Adjustments To Income For MAGI Programs
Deductions and adjustments include:
Alimony paid to someone else for agreements finalized on or before December 31, 2018.
Student loan interest paid
Certain educator expenses
Most contributions to individual retirement arrangements (IRAs)
Penalties on the early withdrawal of savings
Certain tuition and fees
Health savings account contributions
Certain business expenses not included in net income
Net operating loss
Other adjustments to gross income on IRS 1040 form lines 23-35
Moving expenses for Active Duty Military members that are ordered to move or change duty stations.
3. Do Not Include Credits And Deductions Listed On Page 2 Of IRS Form 1040 For MAGI Programs:
The standard deduction
Itemized deductions detailed in Schedule A
Child tax credit
4. Some Business Expenses May Be Deducted From Gross Self-Employment Income
Refer to M902 for Treatment of Self-Employment Income.
5. Allow The Following Deductions For The Medicare Savings Programs And Supplement Security Income (SSI) Program When Calculating Income:
$20 unearned income deduction per assistance unit
$65 plus one-half of the remaining earned income is deducted for each working individual.
Blind or impairment related work deduction for items or services directly related to assuring the blind/disabled individual can work.
Dependent deduction for each ineligible child. Refer to Medicaid Table 1A, for the dependent deduction.
Support payment deduction when there is a court order or state agreement under Title IV-D, and the payment is made by the ineligible spouse, ineligible parent, or ineligible child. Deduct either:
The amount specified in the court order or agreement.
The actual amount paid when less.
The actual amount paid when more if the excess amount is for averages.
Defining Requirement: 20 CFR 416, Subpart K
42 CFR 435, Subpart
Deductions should not be entered into WES for MAGI programs if they do not make a difference in eligibility.