Income

Revised August 15, 2016

WAC 182-509-0300 Modified adjusted gross income (MAGI).

Effective November 7, 2014.

  1. The agency uses the modified adjusted gross income (MAGI) methodology to determine eligibility for MAGI-based Washington apple health (WAH) programs described in WAC 182-509-0305.
  2. MAGI methodology is described in WAC 182-509-0300 through 182-509-0375. Generally, MAGI includes adjusted gross income (as determined by the Internal Revenue Code (IRC)) increased by:
    1. Any amount excluded from gross income under Section 911 of the IRC;
    2. Any amount of interest received or accrued by the taxpayer during the taxable year which is exempt from tax; and
    3. Any amount of Title II Social Security income or Tier 1 Railroad Retirement income which is excluded from gross income under Section 86 of the IRC.
  3. When calculating a person's eligibility for the programs listed in WAC 182-509-0305, the agency uses the person's MAGI income with the following exceptions:
    1. Scholarships or fellowship grants described in WAC 182-509-0335 used for education purposes are excluded from income;
    2. Income received by American Indian/Alaskan Native individuals described in WAC 182-509-0340 is excluded from income; and
    3. Any income received as a lump sum as described in WAC 182-509-0375 is counted as income only in the month in which it is received.
  4. Countable MAGI income is reduced by an amount equal to five percentage points of the federal poverty level (FPL) based on household size to determine net income except that there is no such reduction of countable MAGI income for parents or caretaker relatives with an eligible dependent child whose net countable income is below fifty-four percent of the FPL (as described in WAC 182-509-0305(1)). Net income is compared to the applicable standard described in WAC 182-505-0100.
  5. When calculating a person's eligibility for MAGI-based programs listed in WAC 182-509-0305, the agency determines the medical assistance unit for each person according to WAC 182-506-0010.

This is a reprint of the official rule as published by the Office of the Code Reviser. If there are previous versions of this rule, they can be found using the Legislative Search page.

Clarifying Information

All foreign income is countable under MAGI even though it is excluded under IRS rules (section 911 IRC).

A 5% FPL income disregard is applied to all Washington Apple Health programs except for parent and caretaker (N01).

Parent or caretaker medical (N01) don't receive the 5% disregard unless they are receiving Medicare.

WAC 182-509-0305 MAGI income -- Persons subject to the modified adjusted gross income (MAGI) methodology.

Effective January 9, 2014.

Eligibility for Washington apple health (WAH) for the following persons is determined using the modified adjusted gross income (MAGI) methodology described in WAC 182-509-0300.

  1. Parents or caretaker relatives with an eligible dependent child (described in WAC 182-503-0565) whose net countable income is below fifty-four percent of the federal poverty level (FPL) as described in WAC 182-505-0240.
  2. Parents or caretaker relatives with an eligible dependent child whose net countable income exceeds the standard described in subsection (1) of this section but is at or below one hundred thirty-three percent FPL as described in WAC 182-505-0250 and 182-507-0110.
  3. Adults with no eligible dependent child with net countable income at or below one hundred thirty-three percent FPL as described in WAC 182-505-0250 and 182-507-0110.
  4. Pregnant women or women within a two-month post-partum period whose net countable income, based on a household size that includes any unborn children, is below one hundred ninety-three percent FPL at the time of application, as described in WAC 182-505-0115.
  5. Children age eighteen or younger in households with net countable income which is below two hundred ten percent FPL as described in WAC 182-505-0210 (3)(a).
  6. Children age eighteen or younger in households with net countable income which is between two hundred ten percent and three hundred twelve percent FPL as described in WAC 182-505-0215. Children who are eligible under this section are subject to premiums as described in WAC 182-505-0225.
  7. Household size for a person who is subject to MAGI income methodologies is determined according to WAC 182-506-0010.

This is a reprint of the official rule as published by the Office of the Code Reviser. If there are previous versions of this rule, they can be found using the Legislative Search page.

WAC 182-509-0310 MAGI income -- Timing of income.

Effective January 9, 2014.

For purposes of determining eligibility for modified adjusted gross income (MAGI)–based Washington apple health (WAH) (see WAC 182-509-0300):

  1. The agency uses a point-in-time estimate to determine a person's countable income.
  2. Point-in-time means that the income is received, or is likely to be received, in the month in which the person submits an application or renewal for WAH, or the month in which the agency completes a redetermination of coverage, with the following provisions:
    1. When a person is paid less frequently than on a monthly basis, (for example, they are self-employed), the agency uses an average to calculate the monthly amount. The average is calculated by:
      1. Adding the total income for representative period of time;
      2. Dividing by the number of months in the time frame; and
      3. Using the result as a monthly average.
    2. When a person is paid more frequently than on a monthly basis, the agency uses the following budgeting method to calculate a monthly amount:
      1. If the person is paid weekly, the agency multiplies weekly expected income by 4.3;
      2. If the person is paid every other week, the agency multiplies expected income by 2.15.
    3. If the person's current income does not represent his or her projected income as evidenced by clear indications of future changes in income, the agency permits the person to estimate a monthly amount by averaging income over a representative period of time.
  3. If the person normally gets the income:
    1. On a specific day, the agency counts it as available on that date.
    2. Monthly or twice monthly and pay dates change due to a reason beyond the person's control, such as a weekend or holiday, it is counted in the month it would normally be received.
    3. Weekly or every other week and pay dates change due to a reason beyond the person's control, it is counted in the month it would normally be received.
  4. For information about how income is verified, see WAC 182-503-0050.
  5. If the person reports a change in income as required under WAC 182-504-0105 and the change is expected to last for two months or longer, the agency updates the estimate of income based on this change, unless the person receives categorically needy WAH coverage as a pregnant woman or child.

This is a reprint of the official rule as published by the Office of the Code Reviser. If there are previous versions of this rule, they can be found using the Legislative Search page.

WAC 182-509-0315 MAGI income -- Ownership of income.

Effective January 9, 2014.

  1. For purposes of determining eligibility for modified adjusted gross income (MAGI)–based Washington apple health (WAH) (see WAC 182-509-0300) income is considered available to a person if:
    1. An individual in the person's medical assistance unit receives or can reasonably predict that he or she will receive the income.
    2. The income must be counted based on rules under chapter 182-509 WAC.
    3. The person has control over the income, which means the income is available to them. If the person has a representative payee, protective payee, or other individual who manages the income on the person's behalf, it is considered as if the person has control over this income.
    4. The person can use the income to meet current needs.
  2. Income that is included in the person's taxable gross income which is required to be reported to the Internal Revenue Service (IRS) is considered as available even if it is paid to someone else or withheld to pay a garnishment, lien or other obligation. (For example, a person manages a block of apartments and lives in one of the apartments. The employer withholds a portion of the person's monthly wages as rent due for the apartment in which he resides. The income that is counted is the gross amount prior to the deduction for rent.)
  3. The agency may conduct post-eligibility reviews of health care applications as described in WAC 182-503-0050. Upon request by the agency, a person must provide proof about a type of income, including submitting clarification on:
    1. Who owns the income;
    2. Who has legal control of the income;
    3. The amount of the income; or
    4. If the income is available.

This is a reprint of the official rule as published by the Office of the Code Reviser. If there are previous versions of this rule, they can be found using the Legislative Search page.

Clarifying Information

When the income varies seasonally, an individual can choose to average or use “point-in-time” methodology when reporting income.

Example: An individual works as a fisherman seasonally during summers, and during the rest of the year, his family lives off of this income. In this case, it might be in the best interest to take an average of income over the year to determine this client's eligibility or if it is more beneficial to the individual, he can choose a point in time calculation stating zero income during the months that he is not working and report his earnings during the summer months.

WAC 182-509-0320 MAGI income -- Noncountable income.

Effective January 9, 2014.

For purposes of determining eligibility for modified adjusted gross income (MAGI)–based Washington apple health (WAH) (see WAC 182-509-0300):

  1. Some types of income are not counted when determining eligibility for MAGI-based WAH. Under the MAGI income methodology described in WAC 182-509-0300, income is not counted if the Internal Revenue Service (IRS) permits it to be excluded or deducted for purposes of determining the tax liability of a person. (See 26 U.S.C. Sections 62(a) and 101-140.)
  2. Examples of income that are not counted include, but are not limited to:
    1. Bona fide loans, except certain student loans as specified under WAC 182-509-0335;
    2. Federal income tax refunds and earned income tax credit (EITC) payments for up to twelve months from the date received;
    3. Child support payments received by any person included in household size under WAC 182-506-0010;
    4. Time loss benefits or other compensation received for sickness or injury, such as benefits from the department of labor and industries (L&I) or a private insurance company;
    5. Title IV-E and state foster care maintenance payments;
    6. Veteran's benefits including, but not limited to, disability compensation and pension payments for disabilities paid to the veteran or family members; education, training and subsistence; benefits under a dependent-care assistance program for veterans, housebound allowance and aid and attendance benefits;
    7. Educational assistance that is not counted under WAC 182-509-0335;
    8. Native American benefits and payments that are not counted under WAC 182-509-0340;
    9. Income from employment and training programs that is not counted under WAC 182-509-0345;
    10. Needs-based assistance from other agencies or organizations that is not counted under WAC 182-509-0350;
    11. Money withheld from a benefit to repay an overpayment from the same income source;
    12. One-time payments issued under the Department of State or Department of Justice reception and replacement programs, such as Voluntary Agency (VOLAG) payments;
    13. Any portion of income used to repay the cost of obtaining that income source;
    14. Insurance proceeds or other income received as a result of being a Holocaust survivor;
    15. Federal economic stimulus payments that are excluded for federal and federally assisted state programs;
    16. Federal twenty-five dollar supplement weekly unemployment compensation payment authorized by the American Recovery and Reinvestment Act of 2009;
    17. Income from a sponsor given to a sponsored immigrant;
    18. Energy assistance payments;
    19. Fringe benefits provided on a pretax basis by an employer, such as transportation benefits or moving expenses;
    20. Employer contributions to certain pretax benefits funded by an employee's elective salary reduction, such as amounts for a flexible spending account;
    21. Distribution of pension payments paid by the employee (such as premiums or contributions) that were previously subject to tax;
    22. Gifts or inheritances to the person that are not counted under WAC 182-509-0355;
    23. Death benefits from life insurance and certain benefits paid for deaths that occur in the line of duty; and
    24. Other payments that are excluded from income under state or federal law.
  3. Income received from the following cash programs is not countable income for MAGI-based WAH programs:
    1. Diversion cash assistance (DCA);
    2. Temporary assistance for needy families (TANF);
    3. State family assistance (SFA);
    4. Pregnant women's assistance (PWA);
    5. Refugee cash assistance (RCA);
    6. Aged, blind, disabled cash assistance (ABD); and
    7. Supplemental security income (SSI).

This is a reprint of the official rule as published by the Office of the Code Reviser. If there are previous versions of this rule, they can be found using the Legislative Search page.

WAC 182-509-0325 MAGI income -- Unearned income.

Effective January 9, 2014.

For purposes of determining eligibility for modified adjusted gross income (MAGI)–based Washington apple health (WAH) (see WAC 182-509-0300):

  1. Unearned income is income received from a source other than employment or self-employment. Examples of unearned income include, but are not limited to:
    1. Tier 1 Railroad Retirement;
    2. Unemployment compensation, except as described in WAC 182-509-0320;
    3. Title II Social Security benefits (including retirement benefits, disability benefits, and benefits for survivors);
    4. Rental income;
    5. Pensions, IRAs, military retirement and annuity payments, except as described in WAC 182-509-0320;
    6. Dividend payments from stocks or shares held in companies; and
    7. Per capita distributions from gaming made by a tribe (see WAC 182-509-0340).
  2. When the unearned income must be counted, the agency counts the gross amount before any taxes or premiums are taken out.
  3. See WAC 182-509-0320 for examples of unearned income that are not counted.

This is a reprint of the official rule as published by the Office of the Code Reviser. If there are previous versions of this rule, they can be found using the Legislative Search page.

WAC 182-509-0330 MAGI income -- Earned income.

Effective January 9, 2014.

For purposes of determining eligibility for modified adjusted gross income (MAGI)–based Washington apple health (WAH) (see WAC 182-509-0300):

  1. Earned income is income received from working. This includes, but is not limited to:
    1. Wages;
    2. Salaries;
    3. Tips;
    4. Commissions;
    5. Profits from self-employment activities as described in WAC 182-509-0365; and
    6. One-time payments for work done over a period of time, if the income is received in the month of application.
  2. When earned income must be counted, the agency computes the countable amount based on deductions from income allowed by the Internal Revenue Service when determining a person's tax liability.
  3. See WAC 182-509-0370 for information on how self-employment income is counted.

This is a reprint of the official rule as published by the Office of the Code Reviser. If there are previous versions of this rule, they can be found using the Legislative Search page.

WAC 182-509-0335 MAGI income -- Educational benefits.

Effective January 9, 2014.

For purposes of determining eligibility for modified adjusted gross income (MAGI)–based Washington apple health (WAH) (see WAC 182-509-0300), the agency or its designee does not count educational assistance as income. Examples include, but are not limited to:

  1. Educational assistance in the form of grants or loans issued under Title IV of the Higher Education Amendments (Title IV - HEA) or through a program administered by the Department of Education (DOE), such as:
    1. Pell grants (Title IV);
    2. Stafford loans (Title IV);
    3. Perkins loan program (Title IV);
    4. State need grant program (Title IV);
    5. Christa McAuliffe fellowship program (DOE);
    6. Jacob K. Javits fellowship program (DOE); and
    7. Library career training program (DOE).
  2. Payments received for education, training, or subsistence under any law administered by the department of Veteran's Affairs (VA).
  3. Student financial assistance provided under the Bureau of Indian Affairs education programs.
  4. Educational assistance in the form of grants or loans under the Carl D. Perkins Vocational and Applied Technology Education Act, P.L. 101-392.
  5. Work study income including:
    1. Federal or state work study income; and
    2. WorkFirst work study income.
  6. Payments to service academy cadets at a military academy.
  7. Payments for the purposes of tuition made on behalf of the individual to an educational organization for the education or training of such individual.

This is a reprint of the official rule as published by the Office of the Code Reviser. If there are previous versions of this rule, they can be found using the Legislative Search page.

WAC 182-509-0340 MAGI income -- American Indian/Alaska Native excluded income.

Effective January 18, 2014.

For the purposes of determining eligibility of American Indians/Alaska Natives for modified adjusted gross income (MAGI)-based Washington apple health (WAH) (see WAC 182-509-0300), the agency excludes from MAGI the following:

  1. Distributions from Alaska Native corporations and settlement trusts;
  2. Distributions from any property held in trust, subject to federal restrictions, located within the most recent boundaries of a prior federal reservation, or otherwise under the supervision of the Secretary of the Interior;
  3. Distributions and payments from rents, leases, rights of way, royalties, usage rights, or natural resource extraction and harvest from:
    1. Rights of ownership or possession in any lands described in (b) of this subsection; or
    2. Federally protected rights regarding off-reservation hunting, fishing, gathering, or usage of natural resources.
  4. Distributions resulting from real property ownership interests related to natural resources and improvements that are:
    1. Located on or near a reservation or within the most recent boundaries of a prior federal reservation; or
    2. Resulting from the exercise of federally protected rights relating to such real property ownership interests.
  5. Payments resulting from ownership interests in or usage rights to items that have unique religious, spiritual, traditional, or cultural significance or rights that support subsistence or a traditional lifestyle according to applicable tribal law or custom;
  6. Student financial assistance provided under the Bureau of Indian Affairs education programs; and
  7. Any other applicable income exclusion as provided by federal law, regulation, or rule, including the Internal Revenue Code, treasury regulations, and Internal Revenue Service revenue rulings, revenue procedures, notices, and other official tax guidance.

This is a reprint of the official rule as published by the Office of the Code Reviser. If there are previous versions of this rule, they can be found using the Legislative Search page.

Clarifying Information

Per capita distributions from gaming is countable income.

Funds that do not count as income include:

Tribal Elder Social Security Assistance (TESSA) plan payments made to tribal elders to promote their general welfare based on their special needs.

Some tribes, such as the Muckleshoot Indian Tribe, provide this type of cash assistance to its elder members.  When determining eligibility for Apple Health, these payments are excluded under the Tribal General Welfare Exclusion Act of 2014.  See also 26 USC § 139E: Indian general welfare benefits.

WAC 182-509-0345 MAGI income -- Income from employment and training programs.

Effective January 9, 2014.

For purposes of determining eligibility for modified adjusted gross income (MAGI)–based Washington apple health (WAH) (see WAC 182-509-0300):

  1. The agency excludes income received from the following programs:
    1. Payments issued under the Workforce Investment Act (WIA);
    2. Payments issued under the National and Community Service Trust Act of 1993. This includes payments made through the AmeriCorps program;
    3. Payments issued under Title I of the Domestic Volunteer Act of 1973, such as VISTA, AmeriCorps VISTA, University Year for Action, and Urban Crime Prevention Program; and
    4. All payments issued under Title II of the Domestic Volunteer Act of 1973. These include:
      1. Retired senior volunteer program (RSVP);
      2. Foster grandparents program; and
      3. Senior companion program.
  2. The agency counts training allowances from vocational and rehabilitative programs as earned income when:
    1. The program is recognized by federal, state, or local governments;
    2. The allowance is not a reimbursement; and
    3. The person is required to file a U.S. tax return and the IRS considers the income to be taxable.

This is a reprint of the official rule as published by the Office of the Code Reviser. If there are previous versions of this rule, they can be found using the Legislative Search page.

Clarifying Information

Educational assistance must be reported on an IRS tax return, but is excluded under MAGI rules.

WAC 182-509-0350 MAGI income -- Needs-based assistance from other agencies or organizations.

Effective January 9, 2014.

For purposes of determining eligibility for modified adjusted gross income (MAGI)–based Washington apple health (WAH) (see WAC 182-509-0300):

  1. The agency does not count needs-based assistance given to a person by other agencies or organizations if the assistance given is not treated as taxable income by the IRS. Examples of needs-based assistance are:
    1. Clothing;
    2. Food;
    3. Household supplies;
    4. Medical supplies (nonprescription);
    5. Personal care items;
    6. Shelter;
    7. Transportation; and
    8. Utilities (e.g., lights, cooking fuel, the cost of heating or heating fuel).
  2. "Needs-based" means eligibility for the program is based on having limited income and/or resources. This definition excludes such incomes as retirement benefits or unemployment compensation which are not needs-based.

This is a reprint of the official rule as published by the Office of the Code Reviser. If there are previous versions of this rule, they can be found using the Legislative Search page.

Note: The Washington Healthplanfinder web portal is programmed to only ask for countable income. If an income type is not requested, it is not countable.

WAC 182-509-0355 MAGI income -- Gifts and inheritances.

Effective January 9, 2014.

For purposes of determining eligibility for modified adjusted gross income (MAGI)–based Washington apple health (WAH) (see WAC 182-509-0300):

  1. A gift is property received by a person without work or cost on his or her part. An inheritance is property received by a person from the estate of a deceased person.
  2. The agency does not count as income to a person any gifts or inheritances, whether cash or noncash, received by the person, except that the agency does count as income to a person any income from any gift or inheritance.
  3. The agency does not count as income to a person any amounts paid on behalf of that person to any person who provides medical care (as defined in Internal Revenue Code Section 213(d)) to that person.

This is a reprint of the official rule as published by the Office of the Code Reviser. If there are previous versions of this rule, they can be found using the Legislative Search page.

Example: An individual receives an inheritance of $500,000. The $500,000 is not countable, however any interest and dividends generated would be reportable and countable income.

Example: Sue receives 24-hour in-home care from a nurse. A family member pays the nurse for taking care of Sue. The agency would not consider the money paid by the family member to the nurse when it calculates Sue’s income.

WAC 182-509-0360 MAGI income -- How the income of a child age eighteen or younger or a tax dependent is counted.

Effective January 21, 2017

The medicaid agency determines what income is counted when determining eligibility for modified adjusted gross income (MAGI)-based Washington apple health under WAC 182-509-0300

  1. When determining countable income for persons described in subsections (2) through (4) of this section, the countable income of a child age eighteen or younger or of a tax dependent is included only when it meets the threshold required for tax filing under 26 U.S.C. Sec. 6012 (a) (1). For purposes of this section, countable income of a child or tax dependent does not include Social Security dependent benefits.
  2. Determining countable income of a tax filer.  The countable income of a tax filer includes the countable income of each member in the tax filer's medical assistance unit (MAU) under WAC 182-506-0012 (1).
  3. Determining countable income of a tax dependent.  The countable income of a tax dependent includes the countable income of each member in the tax dependent's MAU under WAC 182-506-0012 (2).
  4. Determining countable income of a nonfiler.  The countable income of a nonfiler, including a person considered a nonfiler under WAC 182-506-0012 (2) (b) (ii), includes the countable income of each member in the nonfiler's MAU under WAC 182-506-0012 (3).

This is a reprint of the official rule as published by the Office of the Code Reviser. If there are previous versions of this rule, they can be found using the Legislative Search page.

Clarifying Information

The income of a child, age 18 or younger, is not counted if the child is not required to file taxes.

If a child is required to file taxes, the income will count only in the determination of that child's eligibility.

If a child age 19 or over is claimed by a parent, the child's income counts towards the parent's and their own assistance unit, however, it does not count towards any other siblings.

WAC 182-509-0365  MAGI income -- Self-employment income.

Effective January 9, 2014.

For purposes of determining eligibility for modified adjusted gross income (MAGI)–based Washington apple health (WAH) (see WAC 182-509-0300):

  1. Self-employment income is income earned by a person from running a business, performing a service, selling items that are made, or reselling items with the intent to make a profit. This income can be earned if the person is carrying on a trade or business as a sole proprietor or an independent contractor; a member of a partnership that carries on a trade or business; or otherwise in business for themselves (including a part-time business).
  2. A person is considered to be self-employed if they earn income without having an employer/employee relationship with the individual who pays the income. Factors to consider are:
    1. The person has primary control or has the right to control what they do and how they do their job;
    2. The business aspects of the person's job are controlled by the person and not the payer (this includes things like how the person is paid, whether expenses are reimbursed, or who provides tools/supplies);
    3. The person has a written contract stating that he or she is an independent contractor; or
    4. The person reports his or her income using IRS Schedule C, Schedule C-EZ, Schedule K-1, or Schedule SE.
  3. A person is considered to have an employer/employee relationship when:
    1. The individual the person provides services for has primary control of how the work is done; or
    2. The person receives an IRS Form W-2 to report the income that is earned.
  4. Self-employment does not have to be a licensed business for a person's business or activity to qualify as self-employment. Some examples of self-employment are:
    1. Child care that requires a license under chapter 74.15 RCW;
    2. Driving a taxi cab;
    3. Farming/fishing;
    4. Odd jobs such as mowing lawns, house painting, gutter cleaning, or car care;
    5. Running lodging for roomers or boarders. Roomer income includes money paid to a person for shelter costs by someone not included in the person's household who resides in the same home when:
      1. The person owns or is buying his or her residence; or
      2. The person rents all or a part of the residence and the total rent charged to all others in the home is more than the total rent obligation of the person.
    6. Running an adult family home;
    7. Providing services such as a massage therapist or a professional escort;
    8. Retainer fees to reserve a bed for a foster child;
    9. Selling home-made items or items that are supplied to the individual;
    10. Selling or donating biological products such as providing blood or reproductive material for profit;
    11. Working as an independent contractor; and
    12. Running a business or trade either as a sole proprietorship or in a partnership.
  5. A person must keep records of his or her self-employment income and deductions and provide this information to the agency upon request.
  6. The agency does not count receipt of money by a member of a federally recognized tribe from exercising federally protected rights or extraction of exempt resources as self-employment income (such as fishing, shell-fishing, or selling timber from protected tribal land). This is considered conversion of a resource. See WAC 182-509-0340.
  7. A person who is an employee of a company or other individual who does the activities listed in subsection (4) of this section as a part of his or her job duties is not considered to be self-employed.
  8. Self-employment income is counted as earned income as described in WAC 182-509-0330.

This is a reprint of the official rule as published by the Office of the Code Reviser. If there are previous versions of this rule, they can be found using the Legislative Search page.

WAC 182-509-0370 MAGI income -- How self-employment income is counted.

Effective January 9, 2014.

For purposes of determining eligibility for modified adjusted gross income (MAGI)–based Washington apple health (WAH) (see WAC 182-509-0300):

  1. If the person has worked long enough at the business to file a federal tax return for the previous year and it represents his or her current income, the agency determines self-employment income by using the income and deductions claimed on the previous year's tax return.
  2. If the person has not worked long enough at the business to file a federal tax return in the previous year, the agency permits a determination of monthly self-employment income by:
    1. Adding together gross self-employment income and any profit made from selling business property or equipment over the period of time the business has been in operation within the last year;
    2. Subtracting business expenses and income deduction expenses allowed by the Internal Revenue Service that the person would be entitled to if they were filing a full year return; and
    3. Averaging the income to come up with a monthly amount based on the period of time the business has been in operation within the last year.
  3. If the person's current income does not represent his or her projected income as evidenced by clear indications of future changes in income, the agency permits the person to estimate a monthly amount by averaging income over a representative period of time.

This is a reprint of the official rule as published by the Office of the Code Reviser. If there are previous versions of this rule, they can be found using the Legislative Search page.

Clarifying Information

Determining Self Employment Status

Decision Tree

Business Structure Chart

Example: Ron states he is a financial advisor and is paid on commission. To determine if Ron is self-employed, ask if he receives a W-2 (employee) or 1099 (self employed). If he just began working, ask the company he works for which tax document he will receive (W-2 or 1099) or if taxes and FICA will be deducted from his commission checks.

WAC 182-509-0375 MAGI income -- Lump sums.

Effective January 9, 2014.

For purposes of determining eligibility for modified adjusted gross income (MAGI)–based Washington apple health (WAH) (see WAC 182-509-0300):

  1. A lump sum payment is money that a person receives but does not expect to receive on a continuing basis, such as an insurance settlement.
  2. Any portion of a lump sum payment that is awarded for wrongful death, personal injury, damage, or loss of property is excluded from income.
  3. Any remaining portion of a lump sum payment is counted as income if it is received in the month of application, unless it qualifies as noncounted income under another rule, and with the exception of subsections (4) and (5) of this section.
  4. Receipt of a lump sum by a member of a federally recognized tribe from exercising federally protected rights or extraction of exempt resources is considered an exempt resource in the month of receipt and is not budgeted as income.
  5. Federal, state and local tax refunds (including any interest and penalties) and earned income tax lump sums are not counted as income.

This is a reprint of the official rule as published by the Office of the Code Reviser. If there are previous versions of this rule, they can be found using the Legislative Search page.

Clarifying Information

Child Care Providers

  1. Child care providers that are subject to the licensing requirements under chapter 74.15 RCW are self-employed, even if they do not have a current license. Child day-care center operators and family home day-care providers are self-employed.
  2. Individuals who aren’t required to be licensed under state law to provide care are considered to have an employer/employee relationship with the parent of the child for whom they provide care. These unlicensed individual providers are considered to be employees.

Example: Betty is an individual provider paid by Ms. Lee to provide care in the child's home. Betty is Ms. Lee's employee.

Aging and Long Term Care Services Administration (ALTSA) Providers

ALTSA individual providers work at the direction and control of the individual to whom they provide care as well as the state. Their hours and wages are set by the customer and the state. Also, they receive benefits and have representation. WAC 388-71-0505 requires COPES customers to establish an employer-employee relationship. COPES and other ALTSA individual providers are employees.

Corporations - Not Considered Self-employment

Individuals who own a corporation are not coded as self-employed. This is true even if the individual is the sole investor in the business. Corporations are separate entities from their investors and employees.

An individual is considered an employee of a corporation, and may also have income from dividends related to any investment in the corporation. Any income received from the corporation other than wages must be coded as unearned income. This includes any payments made by the corporation for personal expenses (for example: mortgage payments, car insurance, household items).

Corporations include S Corporations and can include Limited Liability Companies (LLC) if they are set up as corporate structures. Partnerships are not incorporated, and are considered self-employment enterprises. For more information on various business structures, visit the IRS website.

  • Last year’s tax returns may not be an accurate reflection of the household’s current monthly income.
  • Before using last year’s tax returns, always confirm with the individual that his or her tax return reflects his or her current income (i.e., nothing has changed).
  • Healthplanfinder is only interested in total income; the amount in each category of income is not important as long as the total amount of income is accurate.
  • When the corporation income varies seasonally, an individual can choose to average or use “point-in-time” methodology.

Worker Responsibilities

The Modified Adjusted Gross Income methodology used for determining eligibility for Washington Apple Health for Adults, Kids, and Pregnant Women, is based on Adjusted Gross Income (as found in the tax return form). Since Line 27 (and not Line 56) is used to calculate Adjusted Gross Income, the amount that needs to be reported is what is on Line 27, which is 50% of the self-employment tax. All expenses allowed by IRS are allowed under MAGI.

Any time income from self-employment is questionable, request a copy of last year’s tax returns.

For the purposes of processing post eligibility reviews, calculations will be determined to the benefit of the individual:

  • Combined average (CA)
  • Anticipated or actual monthly (AM)

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