Medicaid & Qualified Income Trust

by Jeff Franco J.D./M.A./M.B.A. ; Updated July 27, 2017

Most states require applicants for Medicaid long-term care services to have income below a stated maximum. The creation of a Qualified Income Trust will help applicants whose income exceeds the maximum threshold to obtain Medicaid benefits.

Creating a QIT

A QIT must be irrevocable, contain only income of the Medicaid applicant and include a signed written document providing the state with all funds remaining in the trust after the applicant’s death. An applicant will be denied Medicaid coverage for long-term care if all requirements are not strictly adhered to.

Trust Activity

The applicant is required to deposit into the trust all monthly income that exceeds the state’s maximum allowable for Medicaid eligibility. If you fail to deposit sufficient income into the QIT, you will be ineligible to receive Medicaid benefits during that month. For example, Tennessee requires the monthly income of Medicaid applicants and patients to be under $2,020.

QIT Funds

To maintain eligibility for Medicaid, the funds within the trust must only be used for Medicaid approved payments. Approved payments include Medicare premiums, Medicare supplemental insurance, approved dependent and spousal allowances, and a portion of the payment to a nursing home the patient is responsible for.

About the Author

Jeff Franco's professional writing career began in 2010. With expertise in federal taxation, law and accounting, he has published articles in various online publications. Franco holds a Master of Business Administration in accounting and a Master of Science in taxation from Fordham University. He also holds a Juris Doctor from Brooklyn Law School.