Revised August 15, 2016
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.
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.
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.
Educational assistance must be reported on an IRS tax return, but is excluded under MAGI rules.
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.
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.
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.
Determining Self Employment Status
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.
Child Care Providers
- 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.
- 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.
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)