Medical Assistance for Families with Children and Adults

2.2.3.2 Household Composition and Family Size

Overview

Household composition means the people included in an applicant's or enrollee’s household. Household composition determines the family size. Household composition and family size are factors used to determine financial eligibility.

Household composition and family size are determined for each person separately. Household composition and family size may be different for each person on an application or in a household.

Tax Filing Status

Applicants and enrollees do not need to file a federal income tax return or be claimed as tax dependents to be eligible for Medical Assistance for Families with Children and Adults (MA-FCA). Additionally, married couples do not need to file a joint federal income tax return to be eligible. Even if legally separated, a married couple is considered married until and unless they are legally divorced.

The household composition policy for tax filers, tax dependents and non-filers are outlined below. Whose income counts in determining financial eligibility is based on the household composition.

Household Composition and Family Size for Tax Filers and Joint Tax Filers

The household composition for a person who expects to file taxes and who does not expect to be claimed as a tax dependent by someone else includes:

All of the people expected to be on the taxpayer’s federal income tax return including:
- Tax filer
- Joint tax filer
- Tax dependents
The taxpayer’s spouse, if living with the taxpayer and not filing jointly

A person’s household composition may include a deceased person. Deceased people who are expected to be included on the federal income tax return continue to count in the household composition for the remainder of the tax year. A person’s household composition cannot include a deceased person beyond the tax year in which the person died.

The family size for a person who expects to file taxes and who does not expect to be claimed as a tax dependent by someone else includes:

All of the people in the person’s household composition
Unborn children of any pregnant person in the household

People who expect to file taxes and expect to be claimed as a tax dependent by someone one else follow the policy for people who expect to be claimed as a dependent.

Household Composition and Family Size for Tax Dependents

The household composition for a person who expects to be claimed as a tax dependent is based on the household composition of the tax filer who expects to claim them as a tax dependent, unless the person meets one of the tax dependent exceptions. This is true even if the person also expects to file their own tax return.

The household composition of a tax dependent includes:

The tax dependent
Tax filer
Joint tax filer
All other tax dependents
The taxpayer’s spouse, if living with the taxpayer and not filing jointly
If the tax dependent is married, the spouse, if they live together

A person’s household composition may include a deceased person. Deceased people who are expected to be included on the federal income tax return continue to count in household composition for the remainder of the tax year. A person’s household composition cannot include a deceased person beyond the tax year in which the person died.

The family size for a person who expects to be claimed as a tax dependent by someone else is the sum of:

All of the people in the person’s household composition
Unborn children of any pregnant person in the household

Tax Dependent Exceptions

There are different household composition rules for certain tax dependents. Household composition for the people below is determined using the rules for people who do not expect to file taxes and do not expect to be claimed as a tax dependent:

People who expect to be claimed as a tax dependent, but are not the spouse or child of the tax-filer
Biological, natural, adopted and step children younger than age 19 who live with two parents and expect to be claimed as a tax dependent by one of the parents and whose parents do not expect to file a joint tax return
Children younger than age 19 who live with a custodial parent who expect to be claimed as a tax dependent by a non-custodial parent. For purposes of this exception, a court order or binding separation, divorce or custody agreement establishing physical custody determines who is the custodial and non-custodial parent. If there is no such order or agreement or in the event of a shared custody agreement, the custodial parent is the parent with whom the child spends most nights. This does not apply to children who are living with legal guardians, caretaker relatives or on their own who expect to be claimed as a tax dependent by one or more parents.

Whose Income Counts for Tax Filers and Tax Dependents?

The household income of a tax filer, joint tax filer or tax dependent consists of the person’s own income and the income of everyone in his or her household composition, unless specifically excluded.

Exclusions

The income of a child (regardless of age) who:

is included in the household of his or her biological, natural, adopted or step parent, and
is not expected to be required to file a tax return for the taxable year that MA-FCA is being determined.

The income of a tax dependent who:

is not the spouse or child of the tax filer or joint tax filer, and
is not expected to be required to file a tax return for the taxable year that MA-FCA is being determined.

In Appendix F Standards and Guidelines, refer to the Tax Filing Income Thresholds for Tax Dependents to determine whether a child or tax dependent may be expected to be required to file a tax return.

Income that is not taxable (for example, non-taxable social security benefits) is not considered when determining if the child or tax dependent is expected to be required to file a federal tax return. However, if the child or tax dependent is expected to be required to file a federal tax return, all sources of income that comprise the child's or tax dependent's Modified Adjusted Gross Income (MAGI) (including both taxable and non-taxable Social Security benefits) are counted for the household. See the MA-FCA Income Methodology policy for more information.

Household Composition and Family Size for Non Tax Filers and Non Tax Dependents

Non-filers are people who do not expect to file taxes and do not expect to be claimed as a tax dependent. The following people living with the person are included in their household composition:

The person
The person’s spouse
The person’s biological, natural, adopted and step children younger than age 19
If the person is under age 19, the following are also included:
- Biological, natural, adopted and step parents
- Biological, natural, adopted and step siblings, under age 19
The family size for a non-filer includes:
- All of the people in the person’s household composition
- Unborn children of any pregnant person in the household

Whose Income Counts for Non Tax Filers and Non Tax Dependents?

The household income of non-filers and non-tax dependents consists of the person’s own income and the income of everyone in his or her household composition, unless specifically excluded.

Exclusions

The income of a child (regardless of age) who:

is included in the household of his or her biological, natural, adopted or step parent, and
is not expected to be required to file a tax return for the taxable year that MA-FCA is being determined.

In Appendix F Standards and Guidelines, refer to the table of Tax Filing Income Thresholds for Children and Tax Dependents to assist in determining whether a child may be expected to be required to file a tax return.

Income that is not taxable (for example, non-taxable social security benefits) is not considered when determining if the child is expected to be required to file a federal tax return. However, if the child is expected to be required to file a federal tax return, all of the sources of income that comprise the child's Modified Adjusted Gross Income (MAGI) (including both taxable and non-taxable Social Security benefits) are counted. See the MA-FCA Income Methodology policy for more information.

Legal Citations

Code of Federal Regulations, title 26, section 1.36B-1

Code of Federal Regulations, title 42, section 435.603