Programs |
Manual Section |
Caretaker Relative (including TMA and Continued Coverage) Pregnant Woman Child Adult KidsCare |
The following examples are for several of the most common types of MAGI deductions:
1) Contributions to a Health Savings Account
The customer is employed and has Health Savings Account (HSA) contributions deducted from her paycheck every month. She provided pay stubs verifying the deductions. The amount of the monthly HSA contribution is given as a MAGI deduction.
2) Spousal Support
The customer and his wife both pay spousal support to ex-spouses.
The customer’s spousal support agreement was created in 2017 and has not been modified since then. The spousal support he pays every month is allowed as a MAGI deduction.
The customer’s current wife also pays spousal support, but the agreement was created in February 2019. The spousal support she pays every month is not allowed as a MAGI deduction.
3) Educator expenses
The customer is a full-time teacher and is claiming educator expenses. He provides a copy of his last tax returns confirming the deduction. He also has receipts for the current year showing $312.00 in out-of-pocket expenses for class supplies this year. Only $250.00 of the expenses are allowed as a MAGI deduction. The $250 is divided by 12 to get a monthly amount for the deduction.
4) Pre-tax deductions from gross income
The customer and her spouse work and both have pre-tax deductions taken from their pay. The customer provides recent paystubs from their jobs.
She is paid bi-weekly and the paystubs show several deductions from gross pay, which are listed in two separate boxes on the paystub. One box is titled “Pretax deductions” and the second box is titled “Other Deductions”. The Pretax Deductions box shows deductions for health insurance and retirement totaling $132.00 per pay period. The customer is given a MAGI deduction for $132.00 bi-weekly.
The customer’s spouse is paid weekly. His paychecks also show multiple deductions, but they are all listed together in one box. However, one deduction for $28.00 has an asterisk at the end. At the bottom of the paystub, it explains that deductions with an asterisk are taken pretax. The customer’s spouse is given a MAGI deduction for $28.00 weekly.
5) Student loan interest paid
The customer is making monthly student loan payments of $250.00. The proof shows that $180.00 of the payment is for the loan principal, and $70.00 is for the loan interest. The $70.00 in interest is given as a MAGI deduction.
6) MAGI 5% Disregard - Adult
The customer is a household of one person with no dependents. He only meets the non-financial requirements for the Adult program. He has counted income of $1,450.00 per month, which is compared to the 2020 income standard for an Adult of $1,415.00. Since the Adult program is the only program that Andrew might qualify for, the MAGI 5% disregard of $54.00 is applied.
After the 5% disregard is applied, the counted income is $1,396.00. The customer qualifies for the Adult program.
7) MAGI 5% Disregard – Caretaker Relative #1
In October 2020, a married couple apply for themselves. They have six-year old twin children who get SSI-Cash and are already receiving AHCCCS MA.
The parents are filing a joint return and claiming the children. Both parents are under age 65 and do not have Medicare. The family’s counted monthly income is $2,373.00. The parents meet the non-financial requirements for two MAGI programs, the Caretaker Relative and the Adult programs.
The budget group size is four people for both parents. The household income of $2,373.00 is first compared to the income limit for the Caretaker Relative program for a family of four, which is $2,315.00. The parents are over the income limit for the Caretaker Relative program. Since they also meet the requirements for the Adult program, the MAGI 5% disregard is not applied to the income test for Caretaker Relative. The household income is then compared to the income limit for the Adult program for a family of four, which is $2,904.00. The household income is under the Adult limit and the parents qualify for the Adult program. The 5% MAGI Disregard is not applied.
8) MAGI 5% Disregard – Caretaker Relative #2
The customer is 68 years old and has custody of her three grandchildren. She applies for AHCCCS for herself in June 2020. The children are already on AHCCCS. The customer has counted income of $2,350.00 per month. She will be filing taxes and claiming the three grandchildren as dependents. The customer only meets the non-financial requirements for one MAGI program, the Caretaker Relative Program.
The customer’s MAGI budget group includes all four family members. The customer’s income of $2,350.00 is compared to the Caretaker Relative income limit for a household of 4, which is $2,315.00. Since the Caretaker Relative program is the only program that the customer might qualify for, the MAGI 5% disregard of $110.00 is applied.
After the 5% disregard is applied, the counted income is $2,240.00. The customer qualifies for the Caretaker Relative program.