Certified Application Counselor Practice Test

When is alimony counted as income for Medicaid?

1. If received for divorces finalized after 01/01/2019

2. If received for divorces or separations finalized before 01/01/2019

3. Only if it exceeds $1,000

4. It is never counted

The correct answer is: If received for divorces or separations finalized before 01/01/2019

Alimony is counted as income for Medicaid if it is received from divorces or separations finalized before January 1, 2019. This is primarily due to changes in tax law that went into effect starting in 2019, specifically the Tax Cuts and Jobs Act. Under this act, alimony payments are no longer deductible by the payer or taxable to the recipient for divorce agreements finalized after this date. Therefore, for divorce agreements made prior to January 1, 2019, alimony is considered taxable income and must be reported as such when determining Medicaid eligibility. This makes it crucial for applicants who received alimony to identify the date of their divorce or separation agreement to ascertain whether the alimony qualifies as income when assessing their eligibility for Medicaid benefits.