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Covered California and Obamacare related questions from consumers, employers and agents are answered by Phil Daigle with the best information available at the time. Archived entries may no longer be accurate as the Covered California and Obamacare knowledge-base is evolving quickly. TO REQUEST A PERSONAL RESPONSE INCLUDE EMAIL ADDRESS.


Untaxed Disability Income?

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Question: I retired as a Police Officer due to an industrial disability. The money I receive monthly is tax exempt(Fed and State)except for a small portion (190.00 a year currently) and that amount is my AGI for taxes. What amount do I enter as income? AGI per taxes or the monthly amount that is protected?

Answer: Use your AGI of $190. You are eligible for Medi-Cal.

22 Comments

So for clarification, if you are a medically retired police officer, can you qualify for California Care or Obama Care?

The following is from the EDD website : http://www.edd.ca.gov/Disability/FAQEmployersBenefits.htm

Your DI benefits are not reportable for tax purposes with one exception. If you are receiving Unemployment Insurance (UI) benefits, become unable to work due to a disability, and begin receiving DI benefits, your DI benefits are considered a substitution for your UI benefits, and will then be reportable for tax purposes. If DI benefits are reportable, a notice will accompany the first benefit payment sent to you advising that the benefits are being reported to the Internal Revenue Service (IRS). In January the EDD will provide you with a 1099G form showing the reportable amounts paid (no more than the original UI maximum) and forward a copy of the 1099G to the Internal Revenue Service.

PFL benefits are reportable for federal purposes but not state tax purposes. The EDD will provide all claimants with a 1099G form and forward a copy of the 1099G to the IRS. PFL benefits are not taxable or reportable to the California State Franchise Tax Board.

From what I found out by helping out my covered ca clients and talking to multiple medi-cal reps over the phone: SDI is not taxable income unless you’re getting that in lieu of unemployment. Definitely for the covered ca modified adjusted gross income (MAGI) health insurance plan… SDI is not counted. It even says it on the covered ca online while you do your app.

The part that I cannot get a 100% clear answer is that everytime I speak to someone on the county medi-cal side… each person says a different thing. Some say even tho SDI can be non-taxable, they still consider it income… hence disqualifying some people from full-scope medi-cal while covered ca MAGI based program won’t count it as income so they won’t give any subsidy at all.

The newest income chart that was released in nov 2017 from covered ca states that if you’re over 18 yrs old and you make under $16,643 annually, your covered ca application automatically gets sent to the county medi-cal office. so this is the zone where some people get stuck in a weird area where covered ca won’t count SDI as income so the app goes to medi-cal, but medi-cal will count SDI as income and won’t give these people medi-cal coverage.

I’ve been asking this question to pretty much every medi-cal call center rep and even supervisors, but it seems like nobody knows enough to give me a straight answer.

also now there’s two different types of medi-cal: 1. you’re between 18-65 years old and you’re trying to get the MAGI based medi-cal … this will only use your modified adjusted gross income to determine your medi-cal elegibility in CA. you can have a home, you can have money in your savings, retirement accounts, and cars. doesn’t matter. it’s solely based on MAGI

  1. asset-based medi-cal. usually for aged 65 and over or disabled medi-cal… under this medi-cal program, the home you live in is okay, but a 2nd home under your ownership will not get you full-scope medi-cal. and there are other asset testings requirments under this program.

Hi Naomi,

For 2018 I wii be on SDI for the first 8 month and back to work to earn about 20k from work. Do you know how I should count for my 2018 income? If I am asked to show proof of income before September, I will have no income to show. Will that be a problem?

Thank you,

I became unemployed and filed for UI benefits. I received UI benefits for about 3 months and then became disabled and filed for SDI. Since I had been on UI prior to SDI, the SID is considered income and taxable up to the amount of the max UI benefits. This was met after 2 months of SDI. Since then I continue to receive SDI. From Jan-Mar 31 I was employed and received wages and a severance package. Overall how is my income now considered? Since I only receive SDI now and have met the taxable portion is my income now zero? or is it based on all wages/UI from Jan 1 2016

Jocelyn, Yes your son’s SSI payments are included in your household income calculation, but he will still be eligible for Medi-Cal.

Hi my 4 year old is receiving medical but his father recently passed now my son is receiving ssi do I have to report that it’s 1064$a month will my son disqualify being that I work and receive 2200$ a month

My mom just turned 65 years of age, is she eligible for medical. She receive an non taxable disability pension? She will receiving her Medicare in July….Please Help!! Thank you!!

Mary, great question.

Access this link: http://laborcenter.berkeley.edu/pdf/2013/MAGI_summary13.pdf

Refer to the “Add back certain income” box. This is the list of ‘other-income’ Modifiers.

Non-taxable disability income is NOT one of the listed Modifiers, therefore your non-taxable private (non federal) disability income cannot and should not be a factor to determine your Modified Adjusted Gross Income or MAGI. Only income ‘Modifiers’ are the specific sources of income which must be added to increase one’s Adjusted Gross Income which in combination is used to determine one’s total Modified Adjusted Gross Income (MAGI), further used to determine Medi-Cal eligibility.

Non-taxed disability income is not one of the Modifiers, therefore your non-taxed disability income cannot and should not be a factor (should not be counted) to determine your MAGI. Therefore, you are correct, you are eligible for Medi-Cal per the scenario you have described.

Access this link: http://laborcenter.berkeley.edu/pdf/2013/MAGI_summary13.pdf
Print and share with your Medi-Cal folks. As needed, request supervisors and higher management until you access someone knowledgeable, with correct information, and who will in fact assist you, rather than to deny your eligibility due to their poor understanding of correct information.

Also call your county’s Medi-Cal division, as often telephone customer service representatives know there stuff, or go find out when they do not.

Find out more with online search engines, for instance, with terms such as “modifiers of MAGI.”

Good luck.

For the last 2 months I have been going back and forth between Covered California, Medi-Cal, and Certified Enrollment Specialists to find out if I am eligible for Medi- Cal as I my only source of income is from a pre- tax disability plan that I paid for entirely. The enrollment specialists tell me that I am eligible for MediCal because I purchased the plan with pretax dollars. Covered CA and MediCal tell me that I am not eligible for MediCal because my income is too high. Their list of sources of income that do not get counted does not include my disability insurance. I am at such a loss since I don’t qualify for a Covered CA plan nor do I qualify for MediCal. No one agrees and I can’t get the MediCal I need. I see from the responses above that I should be eligible for MediCal. Is there a source or link that contains information on a pretax disability plan someone purchased without their employer contributing would not get counted as income for MediCal? Thanks very much.

SDI is not included in MAGI (NOT taxable) SSDI - social security disability - is included in MAGI (taxable) SSA - social security is included (taxable) Unemployment is included (taxable)

if you already got subsidized plan this year and you weren’t supposed to… i’m not quite sure how much of it you’re going to pay back to the government. we’ll probably just have to wait and see. but def for next year coverage of 2015… you should not include your SDI income. and if you income in below the covered ca subsidized plan threshold, you’ll just qualify for medi-cal for free. with your income of $8,000… you will qualify for medi-cal program.

i am a certified covered ca agent. we are sometimes just as lost as other people because every time we ask covered ca for clarification we get different answers depending on who answers the phone. as for the SDI question i talked to 5 different people over and over and this is what i have learned so far.

when applying for MAGI plans… they do not look at your assets. only income. when applying for non-magi plans… such as medi-cal for people over age of 65 and on welfare… then they do consider your assets.

Does anyone know if social security disability back payments when approved counts towards MAGI income? That could be 6-24 months or more of back pay and easily put me over the obamacare “cliff” of paying back all the subsidy money I get for my limited income ($7000-$8000) although trying to live off credit cards and savings while waiting for @$1500 a month disability.

Also Naomi, how did you get through to a person in Covered CA? All the options I chose just gave me recorded info if they even let me choose options—-mostly got hang up due to too many calls.

I just got off the phone with covered ca rep. SSI, SSA - both count as income SDI - does not count as income and does not get included in MAGI. so it doesn’t count for the purpose of applying for covered ca plan. SDI does not count for MAGI based plans. however, SDI DOES count when you are applying for NON-MAGI based medi-cal program where they DO test your assets. Unemployment counts as income. SSDI - social security disability DOES count as income, but not state disability SDI.

Well this is hopefully good new! I have a telephone interview with SSI on April 7th. Obviously past the March 31st dead line. Now I have an app pending with covered California at the moment. I think that gets me put in to the group of people who have tried, but are unable to get proper coverage. Does anyone know if this is true?

Second, does anyone have a good link to any online documentation regarding Obamacare’s rules for the disability income so I have the right info when I have my interviewer on the 7th? Want all my ducks in a row.

Thanks, Rob

Hi Rob.

As your disability income is nontaxable income, and is either sourced from a private company as disability income, or from a government entity other than Social Security, it seems your disability income will likely not be included in your MAGI.

And, as Phil originally said, if your AGI is then just $190 for the entire year, you are eligible only for no-cost Medi-Cal, as your subsidized health plan.

You may still purchase an individual plan direct from a health insurance company, and at full price. You have until only Monday, March 31st, 2014, to do so.

If you mean that only $190 of your disability payment is applied to your MAGI, and your MAGI is higher based upon your receipt of other taxable income, then this other annual MAGI number will determine your eligibility for either Medi-Cal or a premium tax credit subsidized health plan when purchased through Covered California.

Best to you.

Untaxed:

I believe your Indian income would be counted as one of the Modifiers as part of Modified Adjusted Gross Income (MAGI) calculation. Even at this foreign income level of just $7,000 for the entire year, your household income (your wife and you) would be well under the Medi-Cal income threshold, and therefore I conclude likely you are not eligible for premium tax credit subsidy. Your subsidized health care eligibility would be Medi-Cal, as I see it. Medi-Cal can be applied for through Covered California, at anytime during the year.

And also, at that income level of $7,000, counted for MAGI purposes, you would not be required to file U.S. federal income taxes.

Check with tax professional for appropriate confirmation (or not) and conclusion.

Feel free to contact me for further assistance and Medi-Cal enrollment. I’m listed in this site’s Pro Listings. Would be happy to help.

Best.

Has anyone come up with any confirmed information about the disability benefit that police officers who are medically retired whether or not this is to be added back to the AGI to come up with the MAGI?

Hello Grinrevere Marie.

State Disability Income (SDI) is generally not taxable unless provided as a replacement for Unemployment Insurance.

Because SDI is nontaxable income it is not part of Adjusted Gross Income (AGI).

As Social Security Disability Income (SSDI) must be included as one of the added-back Modifiers to AGI for and of the MAGI calculation, and as there is no published mention I can find (as of now) of any other type of disability income to be included in the total MAGI calculation other than SSDI, I generally conclude that very likely SDI likewise, as nontaxable income and therefore not part of AGI, is likewise also not to be included as part of the MAGI calculation.

This is an additionally helpful resource: http://www.taxes.ca.gov/Income_Tax/specialind.shtml#Disability

Feel to reach me if you would like further assistance.

Is California State disability (SDI) part of MAGI for purposes of Covered CA?

I just got a call from a woman on a Friday night near 8PM who wanted a quick answer from me, to then move on, and go at it alone.

She receives non-taxable disability income (I think as benefits from private disability insurance) and wanted to know if calculated as part of her MAGI. I said likely not but was not completely sure. I tried to better assess her situation with her already-enrollment in a CovCal plan, yet, as I was not 100% on the answer to her needs she decided to move on, even though I suggested I’d find out for her, as I do for my clients.

If only she’d had given me a hour.

Private insurance disability benefits, and qualified non-tax disability income (other than non-taxed SSDI disability income), as well as workers compensation benefits, are NOT part of AGI, and are not part of MAGI.

Since CA State disability (sdi) is not taxable for federal or state taxes, then I am assuming it is NOT included in MAGI for purposes of Covered Care premiums and eligibility for subsidies? I have tried to clarify this and not been successful. Please comment.

I am a retired person from India and getting pension in India .My wife getsinterest income from bank in India.We both hold USA greencards and living in california with my daughter from 2010.My pension started from April 2013 onwards.Due to my pension income in india my daughter has not claimed us as dependents in her USA tax return from 2013.My wife and I have no income in USA i.e 0$ income.Our both total income is $ 7000 (Indian pension + Interest income in india For Full Year) .I am filing my return in india.Should I need to file my return in usa as well? Are we both eligible for Covered California insurance? Our assets is in india are almost upto $ 30000.Kindly let me know the answers.

Would you provide a little more information about this answer? What type of income are you assuming this falls under? I know that Veteran’s disability is not counted in MAGI, but Social Security disability is included. Or would this income fall under worker’s compensation?

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