2.8 Modified Adjusted Gross Income Counting Rules

Within each Modified Adjusted Gross Income (MAGI) assistance group, all counted and eligible individuals’ countable income is budgeted with one exception: if a group member is a child or tax dependent of a counted or eligible member within the same assistance group, the child's or tax dependent's income is only counted if they are “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 they are 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 person in the 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. group, they would not have a parent or tax filer eligible or counted in that group. As a result, the child's or tax dependent's income will always be counted, regardless of whether or not they are expected to be required to file taxes. Children in the care of a Non-legally Responsible Relative (NLRR) are an example of children who are the only counted or eligible people 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 IRSInternal Revenue Service each year. If the child or tax dependent of another member in the same assistance group expects to have less annual taxable income than the amounts below, their income is not included in the eligibility determination for the assistance group.

The following amounts are effective January 1, 2024:

$1,300 per year in taxable unearned income*
$14,600 per year in taxable earned income

*For expected unearned income, do not count Child Support, Social Security, Supplemental Security Income (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, even though the person 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 $1,200; 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 $1,300 per month; with an annual income of $15,600. 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 ($4,800 per year). Kelly and Zack do not plan to file taxes. Albert is not expected to be required to file taxes. The assistance groups 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 per month. Michael is working part-time at Dairy Queen earning approximately $150 per month. Michael is not expected to be required to files taxes. Janet works part-time at Copps and makes $1,300 per month. She will be expected to 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 assistance group 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 assistance groups will be the same as Barb’s assistance group.

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.

Example 5

Joe is married to Deanna, and they have a son Beau who is three years old. They file taxes jointly and claim Beau as a dependent. Deanna and Joe are both working and will be required to file taxes. Deanna is also in the military. Joe applies for BadgerCare Plus for himself and Beau while Deanna is deployed overseas. Even though Deanna will not be eligible, she will be a counted adult, and her income will be counted in the BadgerCare Plus determinations for Joe and Beau.

This page last updated in Release Number: 24-01
Release Date: 04/03/2024
Effective Date: 01/01/2024