Using traditional IRA contributions to lower MAGI and qualify for Medicaid

Forum|Forum|1 year ago
August 16, 2024
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Hello. My mom makes about $3000 too much per year to qualify for Medicaid. I understand that making contributions to a traditional IRA will lower her MAGI, thus making her eligible for Medicaid. I am wondering how I go about doing this. Is it as simple as opening a traditional IRA, beginning to make contributions, and then listing that as a pretax deduction on the Medicaid application form?

Not A Product Question

Bsch4477

Employee

MAGI is adjusted gross income (AGI) plus tax-exempt interest, Social Security benefits not included in gross income.

yes, she opens an IRA account at a financial institution and makes a contribution. You report the MAGI on the Medicaid application based on her tax return amounts. Note that she must have earned income to contribute and if she has an employer retirement plan her contribution could be limited. If over age 50 she can contribute a maximum of $8,000.