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Updates for local agencies, community-based organizations, and providers who provide assistance to members of Wisconsin's health and nutrition public assistance programs.
Minor Changes for Counting Income and Allowing Deductions for BadgerCare Plus Eligibility Starting July 27, 2020
Due to the federal Tax Cuts and Jobs Act of 2017, there are new rules for how the BadgerCare Plus program counts income and deductions related to alimony, spousal support or maintenance, and moving expenses.
Background
Through July 26, 2020, the following rules were used to count income and allow deductions for BadgerCare Plus eligibility:
- Alimony, spousal support, or maintenance payments received by a member under a divorce or separation agreement were counted as income unless the divorce or separation agreement stated that the payments could not be taxed.
- Alimony, spousal support, or maintenance payments made by a member were an allowable income deduction unless the payments could not be taxed.
- Out-of-pocket costs for a job-related move that met certain criteria were an allowable income deduction.
Changes for Members Beginning July 27, 2020
Alimony, spousal support, or maintenance payments from a separation or divorce agreement completed on or after January 1, 2019, will not be counted as income for BadgerCare Plus members.
Alimony, spousal support, or maintenance payments that are part of a separation or divorce agreement completed on or after January 1, 2019, may no longer be claimed as a tax deduction for the person making the payments. This means that these payments can no longer be used as income deductions for BadgerCare Plus.
These two changes will apply to separation or divorce agreements made before January 1, 2019, when that agreement is changed on or after January 1, 2019, and the agreement states that the payments are not taxable.
These policy changes will be applied to all new BadgerCare applications and at the member’s next renewal or reported income change, whichever comes first. To verify the date and tax provisions of separation or divorce agreements, the income maintenance agency may ask members to provide a copy of the agreement.
Moving expenses can no longer be deducted from a member’s income unless the person is an active military member who is ordered to make a permanent move. This policy change will be applied to all new BadgerCare Plus applications and at the member’s next renewal.
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