1805.030.20.10 Income Excluded Under MAGI

IM-23 April 18, 2024; IM-14 March 12, 2024; IM-88 October 24, 2023; IM-19 March 16, 2023; IM-135 October 31, 2022; IM-127 September 22, 2022; IM-45 April 20, 2022; IM-26 March 14, 2022; IM-137 December 23, 2021; IM-47 April 27, 2021; IM-25 March 31, 2021; IM-14 March 8, 2021; IM-25 March 30, 2020; IM-162 October 10, 2019; IM-104 July 22, 2019; IM-101 July 3, 2019; IM-91 June 7, 2019; IM-42 May 15, 2018; IM-149 November 28, 2017; IM-73 November 4, 2016; IM-45 July 18, 2016; IM-28 May 12, 2016; IM-97 November 9, 2015

All sources of income must be entered into the eligibility system including excluded income. Some types of income are excluded in all circumstances (such as but not limited to Supplemental Security Income (SSI) and Child Support). For these income types enter the self-attested income unless an electronic resource verifies another amount.

EXAMPLE: Jan applies for MO HealthNet and declares $0 income on her application. A check of IIVE verifies that she receives $783 in SSI benefits. The amount of SSI benefits verified by the IIVE is entered into the eligibility system.

At times, the income type may be questionable. In this situation, request a reasonable explanation or verification of the income.

EXAMPLE: Judy reports she receives $300/month in child support on the MO HealthNet application. However, Judy’s existing Child Care (CC) case was approved last month and the Family Support Division (FSD) verified she receives $200 in child support and $100 in contributions. Since her current self-attested income is inconsistent with recent verification, additional verification is requested.

Types of excluded income under MAGI methodology include:

1. Child Support

NOTE: When a custodial parent receives money from a non-custodial parent that is not court ordered but is intended to be used to support the child(ren), enter the amount received in the eligibility system as child support. Enter the child support income under the child’s name or divide it equally between the children it is intended to support, who reside in the home. If the child(ren) are not in the home (support may be arrearages), enter the child support income under the parent/caretaker relative.

2. Earned income from a child whose income is under the tax filer threshold of the current tax year as found in IRS Publication 501, and the child is not required to file a tax return.

3. Unearned income from a child whose income is under the tax filer threshold of the current tax year as found in IRS Publication 501, and the child is not required to file a tax return. This does not include a child’s SSA income.

4. SSA income of a child if determined amount is below the threshold (see 1805.030.20.05 Income Included Under MAGI for formula).

5. Earned income from a qualifying relative dependent whose income is under the tax filer threshold of the current tax year as found in IRS Publication 501, and the qualifying relative dependent is not required to file a tax return.

6. Unearned income from a qualifying relative dependent whose income is under the tax filer threshold of the current tax year as found in IRS Publication 501, and the qualifying relative dependent is not required to file a tax return. This does not include the qualifying relative dependent’s SSA income.

7. Alimony from divorces and separations finalized on or after January 1, 2019

8. Certain Alaskan and Native American (Indian) incomes (Income derived from distributions, payments, ownership interests, and real property usage rights)

- Any funds distributed per capita to or held in trust for members of any tribe under Public Law 92-254, Section 7 of Public Law 93-134, Public Law 94-540, Section 4 of Public Law 97-458, or Section 2 of Public Law 98-64.
- Pursuant to Section 15 of Public Law 100-241, any of the following distributions from a Native Corporation established pursuant to the Alaska Native Claims Settlement Act (Public Law 92-203):
  - Cash (including cash dividends on stock received from a Native Corporation) not exceeding $2000 per individual per year
  - Stock (including stock issued or distributed by a Native Corporation as a dividend or distribution on stock)
  - A partnership interest in land, land, or an interest in land received from a Native Corporation as a dividend or distribution on stock
  - An interest in a settlement trust
- Payments received by any member of the Passamaquoddy Tribe, the Penobscot Nation, or the Houlton Band of Maliseet Native Americans pursuant to the Maine Indian Claims Act of 1980 (Public Law 96-420).
- Payments received by any member of the Aroostook Band of Micmacs pursuant to the Aroostook Band of Micmacs Settlement Act (Public Law 102-171).

NOTE: Payments issued outside of a trust to individual members of a tribe on a per capita basis, such as casino profits, are countable income in the month received.

9. Lump sum payments (an amount received as a lump sum is counted as income in the month received)

EXCEPTION: Gifts and inheritances are not included, except when there is income generated from the gifts or inheritances such as rent received from property. That income is taxable and counted under MAGI methodology.

10. SSI

11. All Veterans Benefits paid by the Veterans Administration – Include under this income type veterans benefits payments to veterans with service-connected disabilities resulting from exposure to Agent Orange

12. Temporary Assistance, Blind Pension, Supplemental Aid to the Blind, Vocational Rehabilitation, and other government cash assistance

13. Welfare payments from another state

14. Foster Care Payments

15. Worker’s Compensation Payments

16. Federal tax credits and federal income tax refunds

17. Proceeds from life insurance, accident insurance, or health insurance

18. Volunteer Income

- Any payments for supportive services or reimbursement of out-of-pocket expenses made to individual volunteers serving as foster grandparents, senior health aides, or senior companions; in the Service Corps of Retired Executives (SCORE) and Active Corps of Executives (ACE); and in any other programs under Titles II and III of the Domestic Volunteer Services Act of 1973 (Public Law 93-113).
- Payments to volunteers under Title I, Section 404 (g) of Public Law 93-113 (includes Vista, University Year for Action (UYA), etc.).

19. Scholarships and grants for educational purposes, and not living expenses (income associated with room and board expenses is included)

- Loans or grants to an undergraduate student for educational purposes made or insured under any program administered by the Commissioner of Education. This includes:
  - Basic Education Opportunity Grants Program (BEOG)
  - Supplemental Educational Opportunity Grants (SEOG)

NOTE: Include as income any of the above grants available to students for current living expenses (grants – educational expenses = money available for current living expenses).

- Scholarship monies for educational purposes.
  - NOTE: Include as many scholarships available to students for current living expenses (scholarships – educational expenses = money available for current living expenses).
- Other grants received. Grants not available for current living expenses are excluded as income in preparing the budget.

20. HUD Community Development Block Grants for property rehabilitation.

21. All income from College Work Study. This applies only to the federal program specifically titled College Work Study. It does not apply to any other work study program.

22. Income for nutrition programs for the elderly, any benefits paid under Title VII of the Older Americans Act of 1965, as amended.

23. Highway relocation assistance paid under the Federal Aid Highway Act of 1968.

24. Supplemental food assistance received under the Child Nutrition Act of 1966 as amended and the special food service program for children under the National School Lunch Act.

25. A bona fide (valid) loan from any source, including student loans.

- National Direct Student Loans (NDSL)
- Guaranteed Student Loans

A loan must be:

Supported by a written agreement to repay within a specified time, or
Received from an individual or establishment engaged in the business of making loans

If neither of the above conditions apply, consider money received to be a valid loan if the participant acknowledges either verbally or by a written statement to the lender:

an obligation to repay (with or without interest)
a pledge of real or personal property or anticipated income with the intent to repay when funds become available or future anticipated income is received; or
a written timetable and plan for repayment

26. Experimental Housing Allowance Program payments made under Annual Contributions Contracts entered into prior to January 1, 1975, under Section 23 of the U.S. Housing Act of 1937, as amended

27. Earned Income Credit (EIC) advance payments or refunds

28. Income received when the President declares a disaster, any federal major disaster and emergency assistance provided to individuals and families under the Disaster Relief Act as amended and comparable disaster assistance provided by states, local governments, and disaster assistance organizations under Public Law 100-707

29. Any payment received from Economic Impact Payments, also known as COVID-19 Stimulus, approved as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act signed into law on March 27, 2020, Consolidated Appropriations Act, 2021, and the American Rescue Plan Act, 2021. These payments were made automatically to qualifying individuals.

EXCEPTION: Payments received from Economic Impact Payments are not entered into the system.

30. Agent Orange Aetna payments received from the fund established pursuant to the settlement in the Agent Orange product liability litigation (In Re: Agent Orange product liability litigation, M.D.L. No. 381 (E.D.N.Y). This settlement fund was closed in 1997

31. Restitution payments not exceeding $20,000 received by individuals of Japanese ancestry who were interned during World War II. These payments are authorized under Section 105 of Public Law 100-383, the Civil Liberties Act of 1988

32. Restitution payments not exceeding $12,000 received by Aleuts who were interned during World War II. These payments are authorized under section 206 of Public Law 100-383, Aleutian and Pribilof Islands Restitution Act

33. Radiation Exposure Compensation Act payments authorized by Public Law 101-426, enacted October 15, 1990

34. The allowance provided to children of Vietnam veterans (including adult children) who were born with the congenital defect spina bifida

35. Vocational rehabilitation payments made for maintenance, transportation, tuition, fees, etc., in connection with a participation in training or school attendance subsidized by the Division of Vocational Rehabilitation

36. Small non-recurring cash gifts such as those for Christmas, birthdays, and graduations not exceeding the percentage of need standard for the assistance group in a month

37. Case management advance payment or reimbursement to the individual for child care, transportation, work-related expenses, and work-related supportive services

38. Welfare to Work funds received for a time limited training program (Work Experience)

39. Workforce Innovation and Opportunity Act (WIOA) funds received for a time limited training program (Work Experience)

40. Chaffee Foster Care Independence Program crisis intervention funds in the form of payment to third-party vendors

41. Income received from the Crime Victims Fund

42. Trade Adjustment Assistance (TAA) and Trade Readjustment Allowance (TRA) benefits are available to workers who lost their jobs or whose work hours and wages are reduced as a result of increased imports. TRA is a weekly benefit payable to eligible workers following exhaustion of unemployment benefits. It is paid only to individuals enrolled in a training program. An individual may also receive an allowance for transportation and living expenses if attending training or conducting a job search beyond the normal commuting distance from home. If the individual finds a job beyond the normal commuting distance from home and wants to relocate to the job site, TAA may provide a relocation allowance. Count as income TRA and TAA payments for living expenses (room, board, clothing, etc.). Exempt from income TRA and TAA allowances for transportation, education.

43. Reimbursements for living expenses

44. For Achieving a Better Life Experience (ABLE) accounts, the following income is not counted under MAGI:

- Contributions to an ABLE account from a third party
  - EXAMPLE: Amy is age 25. Amy’s mother deposits $100 into Amy’s ABLE account. The amount her mother deposits is not taxed or counted as part of her income because it is considered a non-taxable gift to Amy.
- Distributions from a Special Needs Trust Deposited into an ABLE account
- Distributions or withdrawals from an ABLE account used for qualified disability expenses (QDEs)
- Account earnings such as interest, dividends, or other distributed returns to an ABLE account

45. Adoption Subsidy/Assistance Payments are not taxable income and therefore excluded in the MAGI budget. Enter Adoption Subsidy/Assistance Payments under the adopted child(ren).

EXCEPTION: If the subsidy payment exceeds the amount the family spends to support the adopted child(ren) the income is taxable and should be included in the MAGI budget. This situation may occur if the Adoption Subsidy/Assistance Payment is the family’s sole source of income. If the Adoption Subsidy/Assistance Payment is the family’s sole source of income and over the tax filer threshold, enter the income under the adoptive parent(s).

46. Crowdfunding Accounts (Third Party Network Transactions). Crowdfunding is the process of raising money for a business, project, or charitable cause from many individual donors (the crowd).

- The payment card transactions and/or in settlement of third-party payment network is under the minimum reporting thresholds of:
  - Gross payments of $600 or more
- If the funds are above the threshold and the participant expects to receive an IRS Form 1099-K, the donations may become taxable, and therefore, countable
  - See IRS form 1099-K
  - Someone can expect to receive a 1099-K when goods or services were received for a crowdfunding donation
  - If countable, treat the donation as a lump sum unless the funding event is ongoing

EXAMPLE: John held a car wash to raise money and accepted donations through a GoFundMe account. He is reporting less than $600 in gross donations from the crowdfunding event and he does not expect to receive a 1099-K form. John’s crowdfunding donations are EXCLUDED from his MAGI budget.

EXAMPLE: Molly held a bake sale to raise money and accepted donations through an Indiegogo account. She expects to receive a 1099-K form. She is reporting more than $600 in gross donations from the crowdfunding event. Molly’s crowdfunding donations are INCLUDED for her MAGI budget for the month in which the donations were received.

EXAMPLE: Jill raised money and accepted donations through a Crowdfunder account. She is reporting more than $600 in gross donations and did not provide goods or services in exchange for the donations; therefore, she does not expect to receive a 1099-K form. Jill’s crowdfunding donations are EXCLUDED from her MAGI budget.

47. Disability Benefits from short-term or long-term disability plans

- If premiums are paid by the covered individual, payments from the plan to the covered individual are not countable/excluded
- If plan premiums are paid by the covered individual’s employer, payments from the plan are countable/included

48. Section 529 plans (also known as Qualified Tuition Programs) are a type of investment account used to save for or provide for education expenses. These accounts are known as MOST accounts in Missouri. Apply this guidance to all Section 529 plans, including 529 plans established in other states.

Exclude as income distributions from a MOST account if the funds are used for qualified education expenses such as:

Room and board, tuition, fees, books, supplies and other related expenses for higher education, or
Tuition at a qualified elementary or secondary school

See IRS Publication 970 for more information.

Refer to the Electronic Verification System (EVS) Manual for information on electronic data sources.