If you are a resident of the United States of America, you have probably heard about the term Medicaid benefits. But in case you are not familiar with the term, States may provide Medicaid benefits on a fee-for-service (FFS) basis, through managed care plans, or both. The state pays providers directly for each covered service received by a Medicaid beneficiary under the FFS model.
Who can get this benefit?
- Pregnant women.
- Children under 19.
- Parents/Caretaker relatives (people who live with their child, grandchild, or another relative or step-relative, under age 18 or 19 if a full-time student).
- Childless adults ages 19-64, including disabled individuals who are NOT on Medicare.
- Those who are on a family planning benefit program.
However, in the financial qualification process States take both income and assets into account. And not all of them qualify into the list of Medicaid. For instance, Medicaid will not pay for: Durable medical equipment replaced through a warranty, provided by another government agency.To qualify for Medicaid in 2021, a single applicant must earn less than $2,382 per month and have up to $2,000 in countable assets. But apart from that, there are other things that come to the list. Check the list below to know more –
- Taxable interest.Dividends.
- Unemployment Benefits.
- IRA distributions.
- Income from self-employment
- State income tax refunds
- Rental income
- Social Security Benefits (this is true even if your benefits are not taxable).
These are a few basics that we need to know about Medicaid payments. Now, what is really new in this story? I mean, why all of a sudden we are talking about this. Well, we have all the right reasons to talk about this now. Because finally, the IRS has excluded Medicare Payments from the gross income.
How does that work?
For the longest period, Medicaid payment was included in the gross income which means, the receivers’ had to pay tax even for the benefits they used to get from the states. But under section 131 of the Internal Revenue Code (IRC) exempts foster care payments from gross income, but only when the foster individuals are placed in the caregiver’s home by the state. Despite the statutory language, IRS Notice 2014-7 considers Medicaid waiver payments to be excludable “difficulty of care” foster payments. As a result, taxpayers can deduct these payments from their taxable income.
What is your benefit in this?
Very simple, Medicaid Payment is now non-taxable. This means, now the payment you get for taking care of the elderly, children, or any of your loved ones, is all yours.
Still, having trouble understanding the process? For that, you need an accounting expert who will not only make you understand but will guide you through this process. Ahad & Co, an accounting firm based in Bronx, New York is devoted to making you understand all the pros and cons of taxes. They will not only help you get the refund but will also guide you throughout the process. So yes, if you want to know how Medicaid payments work, Ahad & Co could be your convenient solution.