2.8 Test Group Financial Rules

2.8.1 Non-MAGI Income Counting Rules
2.8.2 MAGI Income Counting Rules

2.8.1 Non-MAGI Income Counting Rules

Under non-MAGIApply to households whose eligibility is determined using BadgerCare Plus relationship rules (prior to March 31, 2014) to budget income for a household prior to transitioning to MAGI BadgerCare Plus budgeting rules. BadgerCare Plus rules, the income and/or needs of all BadgerCare Plus Test Group members will be used to determine financial eligibility for all members of the BadgerCare Plus Test Group.

Exception: If a child is living with a caretaker relative, the child’s financial eligibility is determined using only the child’s income. The income from the caretaker relative and the caretaker relative’s spouse is never used in the child’s eligibility determination. Likewise, the child’s income is never used when determining the eligibility of the caretaker relative and his or her spouse. In addition, caretaker relative and the children living with the caretaker relative do not count each other when determining the BadgerCare Plus Test Group sizes.

All members in the BadgerCare Plus Test Group will be counted when determining the BadgerCare Plus Test Group size even when there is no health care request for a member.

The income of all counted adults and children in the BadgerCare Plus Test Group is used when determining the financial eligibility for all Test Group members, except the income of SSI recipients or other Test Adults or Test Children.

Test Children and Test Adults are included in the group size but their income is not counted when determining eligibility for the group.

2.8.2 MAGI Income Counting Rules

Within each MAGIModified Adjusted Gross Income. MAGI rules are used to determine BadgerCare Plus eligibility for new applicants beginning in 2014 and for existing members as of March 31, 2014, or their next regularly scheduled renewal, whichever is later. MAGI rules are based on tax relationships and family relationships, and they consider taxable income and whether children and tax dependents are required to file. assistance group, all counted and eligible individuals’ income is counted with one exception: if a group member is a child or tax dependent of a counted or eligible member within the same assistance group, his or her income is only counted if he or she is “expected to be required” to file a tax return for the current year. If the tax dependent or child chooses to file a tax return when he or she is not required to, their income will not be counted. Tax dependents’ and children’s income is only counted when they are “expected to be required” to file a tax return.

Note: If a child or tax dependent is the only individual in the MAGI group, he or she would not have a parent or tax filer eligible or counted in that group. As a result, his or her income will always be counted, regardless of whether or not she or he is expected to be required to file taxes. NLRRNon-legally Responsible Relative (NLRR) Caretaker is a caretaker who has no legal responsibility for the child under their care. NLRR caretakers and their spouses can be eligible for BC+ as caretakers. children are an example of children who are the only counted or eligible individuals in a MAGI group.

Tax dependents are only required to file a tax return if they have more income than the filing thresholds set by the IRS each year. If the child or tax dependent of another member in the same AG expects to have less annual taxable income than the amounts below, his or her income is not included in the eligible determination for the AG.

The following amounts are effective January 1, 2015:

$1,050 per year in taxable unearned income, or
$6,300 per year in taxable earned income.

Note: The filing thresholds for tax dependents did not change for 2016.

For expected unearned income, do not count Child Support, Social Security, SSI, Workers' Compensation, Veteran’s Benefits, money from another person, or educational aid.

These income counting rules apply regardless of whether the assistance group was formed based on MAGI Tax Filing Rules or MAGI Relationship Rules.

The income of household members who are currently out of the home due to military activity will still be counted according to MAGI rules, meaning it may be counted, even though the individual will not be eligible on the case.

Example 1: Jack and Jill are married and will be filing a joint tax return. They have two children, Mickey (16) and Minnie (12), whom they will claim as tax dependents. Minnie has no income, but Mickey works at McDonald’s earning approximately $100 per month. Mickey’s annual earned income is expected to be $1200; he is not expected to be required to file a tax return at the end of the year. Mickey’s income is not counted.

Example 2: Daisy plans to file taxes this year. She has one tax dependent, her son Donald (16), who works part-time at a grocery store. He earns $550 per month; with an annual income of $6,600. Based on this income, Donald will be expected to be required to file a tax return. Donald’s income is counted.

Example 3: Kelly and Zack are non-married co-parents and have two children, Jessie (17) and Albert (14). Albert mows lawns in the summer and makes around $300 for the year. The only other income in the household is Zack’s unemployment payment in the amount of $400 per month ($4800 per year). Kelly and Zack do not plan to file taxes. Albert is not expected to be required to file taxes. The AGs for this case will be based on non-MAGI relationship rules since there is no tax filer in the household. Zack’s UI payment will be counted, but Albert’s self-employment income is not counted because he is not expected to be required to file.

Example 4: Michael (16) and his sister Janet (17) live with their aunt Barb and her two children. Barb applies for BadgerCare Plus for herself, her two children and her niece and nephew. Barb states she plans to file taxes and will be claiming Michael, Janet, and her two children as tax dependents. Barb is self-employed earning about $800/mo. Michael is working part-time at Dairy Queen earning approximately $150/month. Michael is not expected to be required to files taxes. Janet works part-time at Copp’s and makes $600/mo. She will be expected be required to file taxes. Outcome for Barb Barb’s assistance group will consist of herself and all four children since she will be claiming them as tax dependents. Michael’s income will not be counted in Barb’s AG because he is not expected to be required to file taxes, but Janet’s income will be counted in Barb’s group because Janet is expected to be required to file taxes. Barb’s children’s AGs will be the same as Barb’s AG. Outcome for Michael and Janet

Michael and Janet will both have an assistance group of two (MAGL) since they are siblings being claimed as tax dependents by someone living in the home who is not their parent. Michael and Janet’s groups are built using MAGI relationship rules. All of Michael’s and Janet’s earned income will be countable when determining their eligibility because they are not the children or tax dependents of someone in their group.

This page last updated in Release Number: 16-02

Release Date: 08/08/2016

Effective Date: 01/01/2016