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500.15 Financial Eligibility for MinnesotaCare |
Effective: January 1, 2014 |
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500.15.05.05 MinnesotaCare Income Methodology |
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Financial eligibility for Minnesota Care is determined using the Modified Adjusted Gross Income (MAGI) methodology. The new eligibility system gathers information to determine an individual's adjusted gross income and three additional types of income to determine the MAGI income that is used to determine eligibility for MinnesotaCare.
Federal taxable income are the different types of income that appear on lines 7 through 21 on the IRS form 1040, lines 7 through 15 on the IRS form 1040-A and line 6 on IRS form 1040-EZ. Only the taxable portions of these types of income are included in the adjusted gross income. See the appropriate IRS form instructions for examples of federal taxable income. The general types of taxable income include the following:
Wages, salary and tips
Interest
Dividends
Taxable refunds, credits or offsets of state and local income taxes
Alimony received
Business income
Capital gains
Other gains
Individual retirement account (IRA) distributions
Pension and annuity payments
Income from rental real estate, royalties, partnerships, S corporations, trusts, etc.
Farm income
Unemployment compensation
Social Security benefits
Other income
Deductions that appear on lines 23 through 35 on the 1040 or lines 16 through 19 on the 1040-A are subtracted from gross income to calculate the adjusted gross income. Only specific types of deductions are allowed. See the appropriate IRS form instructions for examples of types of deductions. The general types of tax deductions include:
Educator expenses
Certain business expenses of reservists, performing artists and fee-basis government officials
Health savings account
Moving expenses
Deductible portion of self-employment tax
Self-employed Simplified Employee Pension (SEP), Savings Incentive Match Plan for Employees (SIMPLE) and qualified plans
Self-employed health insurance
Penalty on early withdrawal of savings
Alimony paid (spousal support)
IRA deduction
Student loan interest
Tuition and fees
Domestic production activities
MinnesotaCare eligibility is determined using the MAGI income methodology. Household income calculated using the MAGI income methodology includes the types of income included in adjusted gross income with the following additions:
Nontaxable Foreign Earned Income and housing cost of citizens or residents of the United States living abroad
Nontaxable interest income
Nontaxable Social Security and tier one railroad retirement benefits
Income Verification for MinnesotaCare
Minnesota Statues, section 256L.01
Code of Federal Regulations, title 42, section 155.305