Medicaid Policy
Medicaid Policy
All federal tax refunds, including any refundable tax credits, are excluded from countable assets for 12 months. The 12-month exclusion begins the month after a refund is received. State tax refunds or credits are not excluded from countable assets beginning the month after receipt.
When an individual's assets exceed the asset limit and there are cash resources, ask the individual if any portion of the cash resource is from a federal tax refund or refundable credit.
Do not count the federal tax refund amount received beginning January 1, 2010 for 12 months beginning with the month after it is received. This includes refundable credits added to the refund amount such as the earned income tax credit, child tax credit, or other tax credits like energy efficient appliance, home improvements, or first-time, home buyers credit.
If an individual fails a review due to being over assets, ask the individual if any portion of the cash resource is from a federal tax refund received in the previous 12 months (but not earlier than January 1, 2010.) If so, exclude that amount for the applicable 12-month period and redetermine eligibility.
This exclusion applies to federal tax refund amounts that are placed in a trust for the 12-month period after receipt of the refund, even if the funds in the trust would normally count.
After excluding the refund for 12 months, any remaining amount the individual retains counts as an asset.
This exclusion period applies to each receipt of federal tax refunds separately.
This exclusion does not apply to the value of assets purchased with refunds such as a car or other countable resource.
Interest earned on retained tax refunds is not excluded from income or assets under this policy. (See 415-7 on excluding irregular and infrequent income.)