Full answer: Medicaid uses Modified Adjusted Gross Income (MAGI), the same income definition as ACA marketplace plans, to determine eligibility for most adults and children under 65. MAGI counts wages, salary, tips, self-employment net income, unemployment compensation, alimony from pre-2019 divorces, rental income, capital gains, interest, dividends, and the taxable portion of Social Security benefits. It does NOT count SSI payments, child support received, gifts, inheritances, SNAP or TANF benefits, workers' compensation, most veterans' benefits, or tax refunds. In 2026, the income limit for Medicaid expansion states is 138% of the federal poverty level, which equals $22,025 for a single adult.
Medicaid eligibility for most Americans under 65 comes down to one number: your Modified Adjusted Gross Income (MAGI). MAGI is not the same as your paycheck total or your tax refund amount. It is a specific federal definition that includes some income sources and excludes others, and getting it wrong is the single most common reason people either assume they don't qualify when they do, or apply and get denied because their reported income was calculated incorrectly.
This guide covers every income source that Medicaid counts, every source it excludes, how household size affects your income limit, and the 2026 thresholds for expansion and non-expansion states. The MAGI definition used by Medicaid is identical to the one used by the ACA marketplace, so this guide applies to ACA subsidy eligibility as well.
Direct Answer: What MAGI Includes and Excludes
Medicaid counts MAGI: your Adjusted Gross Income plus three add-backs (tax-exempt interest, excluded foreign income, non-taxable Social Security). For most adults, MAGI is very close to AGI. Medicaid explicitly excludes SSI, SNAP, child support received, inheritances, workers' compensation, and most veterans' benefits. Income not on a federal tax return almost never counts.
Income Sources Medicaid Counts (2026)
Medicaid counts all of the following toward your MAGI for 2026 eligibility determinations. Each of these sources is reportable on a federal income tax return and flows into your AGI, which forms the base of MAGI.
- Wages, salary, tips, and hourly pay from employment (W-2 income)
- Net self-employment income (gross business revenue minus allowable business expenses, as reported on Schedule C)
- Unemployment compensation (Form 1099-G)
- Alimony received under a divorce or separation agreement executed before December 31, 2018
- Rental income (gross rent minus allowable expenses like mortgage interest, depreciation, repairs)
- Capital gains from the sale of investments, real estate, or other assets
- Interest income and ordinary dividends from savings accounts, bonds, and investments
- Pension, retirement, and annuity distributions (including IRA withdrawals and 401(k) distributions)
- Social Security retirement and disability benefits (SSDI): the taxable portion only, typically 50% to 85% of the benefit depending on combined income
- Gambling winnings, prizes, and awards
- Jury duty pay
- Taxable scholarships and fellowship grants (the portion used for non-tuition expenses like room and board)
Income Sources Medicaid Does NOT Count (2026)
Medicaid excludes the following income sources entirely from MAGI in 2026. These exclusions are set by federal law (42 CFR 435.603) and apply in all 50 states. Reporting these sources when applying for Medicaid is a common error that can trigger unnecessary denial reviews.
- Supplemental Security Income (SSI) payments from the Social Security Administration
- Child support received (child support paid may be deductible in some calculations)
- Gifts and inheritances (one-time or non-recurring; regular payments from an estate may count)
- SNAP (food stamps) and TANF (Temporary Assistance for Needy Families) benefits
- Workers' compensation payments
- Most veterans' benefits, including VA disability compensation, pension, and the GI Bill
- Tax refunds and the Earned Income Tax Credit (EITC)
- Advance Premium Tax Credits (APTCs) received from ACA marketplace enrollment
- Energy assistance (LIHEAP) and housing assistance (Section 8, HUD vouchers)
- Alimony received under a divorce or separation agreement executed on or after January 1, 2019 (Tax Cuts and Jobs Act change)
- Lump-sum Social Security back-pay (only the current-year portion counts; retroactive months are excluded)
2026 Medicaid Income Limits by Household Size
Medicaid expansion states cover adults with MAGI up to 138% of the 2026 federal poverty level. The 2026 federal poverty level baseline for the 48 contiguous states and DC is $15,960 for a household of 1, so the 138% threshold equals $22,025. The table below shows the 2026 income limits for expansion states across common household sizes. Non-expansion states use different, typically lower thresholds that vary by state and eligibility category; adults aged 19 to 64 in non-expansion states often face an income gap where they earn too much for traditional Medicaid but too little for ACA marketplace subsidies (the ACA gap or coverage gap).
Medicaid income limits by household size, expansion states 2026 (138% FPL)| Household Size | Annual MAGI Limit (2026) | Monthly Limit (Approx.) | FPL Basis |
|---|
| 1 | $22,025 | $1,835 | 138% of $15,960 |
| 2 | $29,863 | $2,489 | 138% of $21,640 |
| 3 | $37,702 | $3,142 | 138% of $27,320 |
| 4 | $45,540 | $3,795 | 138% of $33,000 |
| 5 | $53,378 | $4,448 | 138% of $38,680 |
| 6 | $61,217 | $5,101 | 138% of $44,360 |
| 7 | $69,055 | $5,755 | 138% of $50,040 |
| 8 | $76,894 | $6,408 | 138% of $55,720 |
| Each additional person | +$7,838 | +$653 | +138% of $5,680 |
Based on 2026 federal poverty guidelines published by ASPE (HHS) for the 48 contiguous states and DC. Alaska and Hawaii have higher FPL thresholds. Medicaid expansion states use these 2026 FPL figures year-round for eligibility. ACA marketplace plans use 2025 FPL figures for 2026 plan-year subsidies due to a statutory lag.
Source: ASPE HHS 2026 Federal Poverty Guidelines, Medicaid.gov MAGI eligibility regulations 42 CFR 435.603
How Medicaid Counts Household Size
Medicaid defines household size using tax-filing rules, not physical living arrangements. See how much can you make and still get Medicaid for income limit tables. Your household consists of yourself, your spouse if you file jointly, and any dependents you claim on your federal tax return. A 22-year-old adult living with parents who is not claimed as a dependent files as a household of 1, even if the parents pay rent. A pregnant woman counts as a household of 2 for herself and the expected child. Non-tax-filers (people not required to file a return, typically those with very low income) are counted based on whether they are claimed as dependents by others. Medicaid eligibility workers calculate household size first, then apply the income threshold for that size.
Children under 19 who are not tax filers follow a separate household-size rule: their household includes both parents if the parents live together, or the custodial parent if the parents are separated. CHIP eligibility for children uses the same MAGI definition but at higher income thresholds, typically 200% to 300% FPL depending on the state.
SSI vs. SSDI: Which Social Security Benefits Count?
Social Security has two distinct disability programs, and Medicaid treats them differently. SSI (Supplemental Security Income) is needs-based assistance for low-income elderly, blind, and disabled individuals. SSI payments do NOT count as MAGI income. They are explicitly excluded under federal law. In most states, receiving SSI automatically makes you eligible for Medicaid without a separate MAGI calculation (called SSI-linked or categorical Medicaid). SSDI (Social Security Disability Insurance), by contrast, is an insurance benefit based on work history. SSDI benefits are partially taxable and count toward MAGI: typically 50% to 85% of the monthly SSDI benefit is included in your income calculation depending on your total combined income from all sources.
For seniors aged 65 and older, Medicaid eligibility moves away from MAGI and uses asset tests (counting savings, investments, and property) along with income tests. Long-term care Medicaid for nursing home residents applies asset and income rules that are far more restrictive than MAGI-based Medicaid. If you are over 65 and seeking Medicaid coverage for nursing home care or home-based long-term care, the MAGI rules in this guide do not apply to you.
Non-Expansion States: How Income Rules Differ
Ten states have not expanded Medicaid under the ACA: Alabama, Florida, Georgia, Kansas, Mississippi, South Carolina, Tennessee, Texas, Wisconsin, and Wyoming. In these states, the MAGI income definition still applies, but the income thresholds are far lower for adults. Most non-expansion states cover only pregnant women, children, parents of minor children below very low income limits (often below 50% FPL), people with disabilities (through legacy Medicaid categories), and seniors. Adults aged 19 to 64 who do not have children and are not pregnant or disabled typically do not qualify for Medicaid at all in non-expansion states, regardless of their income.
The coverage gap in non-expansion states affects roughly 1.9 million adults as of 2026. These individuals earn above the state's Medicaid income limit but below 100% FPL, which is the floor for ACA marketplace premium tax credits. They are too poor for marketplace subsidies and too rich for their state's Medicaid, leaving them uninsured with no affordable coverage option. This gap does not affect the MAGI calculation itself, but it changes the outcome of that calculation dramatically depending on your state.
How to Apply and What Documents You Need
Medicaid has no enrollment window. Applications are accepted year-round in all 50 states. Most states process Medicaid applications within 45 days; disability-related applications can take up to 90 days. You can apply online at your state Medicaid agency portal, through the federal marketplace at healthcare.gov (which auto-routes Medicaid-eligible applicants), in person at a county welfare office, or by phone.
- Proof of income: recent pay stubs (past 30 days), most recent federal tax return, W-2 or 1099 forms, unemployment award letter, Social Security benefit verification letter
- Proof of identity: state-issued driver's license, passport, or state ID card
- Proof of residency: utility bill, lease agreement, or bank statement with current address
- Social Security numbers for every household member applying
- Immigration status documents if applicable (green card, work authorization, asylum documentation)
- Household composition information: birth certificates, custody agreements, marriage certificates
Frequently Asked Questions
Does Social Security income count for Medicaid eligibility?
It depends on which type. SSI (Supplemental Security Income) does NOT count and in most states automatically qualifies you for Medicaid. SSDI (Social Security Disability Insurance) and Social Security retirement benefits DO count, but only the taxable portion, typically 50% to 85% of the monthly benefit amount depending on your total income from all sources.
Does child support count as income for Medicaid?
No. Child support received is explicitly excluded from MAGI under federal Medicaid rules (42 CFR 435.603). You should not report child support payments you receive as income on your Medicaid application. However, child support you pay to someone else may reduce your countable income in some state calculations.
Does unemployment count as income for Medicaid?
Yes. Unemployment compensation is counted as income for Medicaid MAGI purposes. It is reported on Form 1099-G, flows into your Adjusted Gross Income, and therefore counts toward your MAGI. If your unemployment benefits push your income above the Medicaid threshold, you may qualify for ACA marketplace subsidies instead.
What is the income limit for a family of 4 for Medicaid in 2026?
In expansion states, the 2026 Medicaid income limit for a household of 4 is approximately $45,540 per year (138% of the 2026 FPL for a family of 4). Monthly, that is roughly $3,795. In non-expansion states, there is no standard adult income limit for a household of 4 because most childless adults do not qualify at all, and parents face state-specific thresholds that vary widely.
Do gig economy earnings (Uber, DoorDash, freelance) count as income for Medicaid?
Yes. Gig economy income is self-employment income for Medicaid MAGI purposes. You count your net earnings after business expenses, the same as Schedule C on your federal tax return. If you drive for Uber, deliver for DoorDash, or do freelance work, you add up your gross platform payments, subtract business deductions (mileage, phone, platform fees), and the net amount counts toward your MAGI.
Does SNAP count as income for Medicaid?
No. SNAP benefits (food stamps) are explicitly excluded from MAGI under federal law and do not count toward Medicaid income. The same applies to TANF cash assistance, LIHEAP energy assistance, and Section 8 housing assistance. Government assistance programs that help with basic needs are excluded from MAGI by design.
Can I qualify for Medicaid if I have a job?
Yes. Having a job does not disqualify you from Medicaid. In expansion states, adults with jobs earning under 138% FPL, which is $22,025 for a single adult in 2026, qualify for Medicaid. Many Medicaid enrollees work part-time, seasonally, or in low-wage jobs. Some states also have Medicaid working incentive programs that allow people earning above the standard limit to buy into Medicaid through a premium.
Do retirement account withdrawals count as income for Medicaid?
Yes. Distributions from traditional IRAs, 401(k) plans, pensions, and annuities count as MAGI income for Medicaid. These distributions are reported on Form 1099-R and flow into your Adjusted Gross Income. Roth IRA distributions, however, are generally not taxable (if the account is at least 5 years old and you are over 59.5) and therefore do not count toward MAGI.
