Income Tax Refunds and Medicaid Qualification

Question:  If I receive a federal income tax refund, could the income from the refund disqualify me for Medicaid?

Answer:    No, the income you receive from a federal income tax refund, even if it is a ‘refundable’ income tax credit (liked the Earned Income Tax Credit), is not counted as income for purposes of Medicaid eligibility.  The Medicaid rules, section 1640.0593 Assets Excluded by Federal Law, states: “Federal income tax returns, including refundable tax credits (EITC and Child Tax Credit) and over-withholding (tax refunds) are excluded as income and assets in the month of receipt and will continue to be excluded as an asset for 12 months from the date of receipt”.  Therefore, reporting the receipt of the tax refund to the Department and Children and Families is not necessary.