259.05 Tax Dependent Exceptions for MAGI (MAM)

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Three exceptions exist when determining household composition for tax dependents. If one of these exceptions exists, the tax dependent's household composition is determined using the non-filer rules. These tax dependent exceptions are:

. The individual expects to be claimed as a tax dependent of someone other than a spouse or a biological, adopted, or step-parent;

. The individual is a child under the age of *19, or under age 21 and a full time student in secondary school (or equivalent vocational or technical training), living with both parents, expects to be claimed as a tax dependent by one parent, but the parents do not expect to file a joint tax return; or

. The individual is a child under the age of *19, or under age 21 and a full time student in secondary school (or equivalent vocational or technical training), who expects to be claimed by a non-custodial parent.

Examples

Example 1: Mom and dad are married, expect to file taxes, have child 1 and child 2 in common, who are both under the age of 18, and they expect to claim as dependents. Mom also has child 3, who is a 19 year old full time student in secondary school, and is expected to be claimed as a tax dependent on the non-custodial parent's taxes.

Step 1: Determine each individual's tax filing status:

. Mom is the tax filer;

. Dad is the joint filer (also considered as a tax filer);

. Child 1 and child 2 are tax dependents, and do not fall under one of the tax dependent exceptions;

. Child 3 is a tax dependent, but falls under one of the tax dependent exceptions;

Step 2: Determine household composition for each individual:

. Mom follows tax filer rules and will include the following people in her household composition: herself, dad, child 1, and child 2;

. Dad follows tax filer rules and will include the following people in his household composition: himself, mom, child 1, and child 2;

. Child 1 and child 2 follow tax filer rules and will include the following people in their households: child 1, child 2, mom, and dad;

. Child 3 follows non-filer rules and will include the following people in his or her household: himself/herself, mom, dad, child 1, and child 2.

Example 2: Mom does not expect to file taxes, and lives with her two children both under the age of 18. Child 1 is claimed on the non-custodial parent's tax return, and child 2 is not claimed as a tax dependent.

Step 1: Determine each individual's tax filing status:

. Mom is a non-filer;

. Child 1 is a tax dependent, but falls under the tax dependent exception for being claimed as a tax dependent by a non-custodial parent;

. Child 2 is a non-filer;

Step 2: Determine household composition for each individual:

. Mom follows non-filer rules and will include the following people in her household composition: Mom, child 1, and child 2;

. Child 1 follows non-filer rules and will include the following people in his or her household composition: himself/herself, child 2, and mom;

. Child 2 follows non-filer rules and will include the following people in his or her household composition: himself/herself, child 1, and mom.

Example 3: The father of child 1 in example 2, expects to file taxes, lives alone, and also applies for MA.

Step 1: Determine each individual's tax filing status:

. Father of child 1 is a tax filer;

Step 2: Determine household composition for each individual:

. Father of child 1 follows tax filer rules and will include the following people in his household composition: himself/herself, and child 1.

The father of child 1 does not qualify for MA under a MAGI-related category, and must be evaluated for eligibility as a non-MAGI related group. He cannot include child 1 in his household composition, as non-MAGI eligibility does not follow tax-filer rules. There are no MAGI households under this example.

Example 4: Mom is over the age of 19 and pregnant with one fetus, expects to file taxes, and lives with her child and her mother, whom she expects to claim as tax dependents.

Step 1: Determine each individual's tax filing status:

. Mom is a tax filer;

. Child is a tax dependent;

. Mom's mother is a tax dependent, but falls under one of the tax dependent exceptions;

Step 2: Determine household composition for each individual:

. Mom follows tax filer rules and will include the following people in her household composition: herself, her mother, child, and fetus;

. Child follows tax filer rules and will include the following people in his or her household composition: himself/herself, mom's mother, mom, and mom's fetus;

. Mom's mother follows non-filer rules and will include the following people in her household composition: herself.

Example 5: Mom and dad live together and have a child in common who is 20 and a full time student in secondary school. Mom and dad are not married. Both mom and dad plan to file their own taxes. Dad claims the child as a dependent on his taxes.

Step 1: Determine each individual's tax filing status:

. Mom is a tax filer;

. Dad is a tax filer;

. Child is a tax dependent.

Step 2: Determine household composition for each individual:

. Mom follows tax filer rules and will include the following people in her household composition: herself;

. Dad follows tax filer rules and will include the following people in his household composition: himself and child;

. Child follows non-filer rules and will include the following people in his or her household composition: himself/herself, mom, and dad.

References: 42 CFR 435.603