Medicaid income limits are one of the most searched and most confusing topics in elder care planning. The rules vary significantly from state to state and the numbers change every year. This guide explains how Medicaid income limits work for long term care in plain English — including what counts as income how the limits are set and what happens if your income is too high.
Why Medicaid Income Limits Matter
Medicaid is the primary payer for long term nursing home care in the United States covering more than 60 percent of all nursing home residents. To qualify for Medicaid long term care benefits applicants must meet both an income limit and an asset limit. This guide focuses on the income side of the equation.
Understanding Medicaid income limits matters because many people assume they earn too much to qualify — when in fact they may be eligible or may be able to qualify with proper planning.
How Medicaid Income Limits Work
Medicaid income limits for long term care work differently than most people expect. There are two key points to understand.
Point 1 — Income limits are not disqualifying in the same way asset limits are
Even in states with strict income caps almost no one is permanently disqualified because of income alone. Applicants whose income exceeds the limit can use a legal tool called a Qualified Income Trust — also called a Miller Trust or QIT — to qualify. The income that goes into the trust each month is not counted toward the limit.
Point 2 — Most of your income goes toward the cost of care anyway
When a Medicaid recipient enters a nursing home virtually all of their income — Social Security pension IRA distributions and other income — must be contributed toward the cost of care each month. The recipient keeps only a small personal needs allowance which ranges from $30 to $200 per month depending on the state. So having a higher income does not mean you keep more money — it means Medicaid pays less of the nursing home bill.
The 2026 Nursing Home Medicaid Income Limit
In 2026 the standard nursing home Medicaid income limit used by most states is $2,982 per month for a single applicant. This amount is equal to 300 percent of the federal Supplemental Security Income — SSI — Federal Benefit Rate of $994 per month.
However not all states use this standard. Some states use different thresholds:
States with no income cap — medically needy states
Approximately 13 states do not use a hard income cap at all. Instead they use a medically needy spend-down system where applicants with income above the limit contribute excess income toward their care costs to qualify. These states include California New York Connecticut and several others. In these states having higher income makes you contribute more toward care but does not disqualify you from Medicaid.
States with lower income caps
A small number of states use a lower income cap than the standard $2,982. Delaware for example uses $2,485 per month. Illinois uses a cap tied to 133 percent of the Federal Poverty Level.
States with different income rules for HCBS programs
Many states use a different — often lower — income limit for their Home and Community Based Services waiver programs than for nursing home Medicaid. Minnesota for example uses $1,305 per month for its Elderly Waiver program. Montana uses $994 per month for its Big Sky Waiver. Kansas and some other states have no income cap for nursing home Medicaid but do have income limits for HCBS waivers.
What Counts as Income for Medicaid?
Medicaid counts virtually all income from all sources. Countable income includes Social Security retirement benefits — Social Security Disability Insurance — SSI payments — pension and annuity income — IRA and 401(k) distributions — wages and self-employment income — rental income — interest and dividend income — alimony — and veterans pension benefits in most states.
What is NOT counted as income
Certain items are not counted as income for Medicaid purposes including the cash surrender value of life insurance — proceeds from the sale of a home in some circumstances — income that goes into a properly established Qualified Income Trust — and in some states VA Aid and Attendance benefits.
What Is a Qualified Income Trust — Miller Trust?
A Qualified Income Trust — QIT — also called a Miller Trust — is a legal tool that allows applicants in income cap states to qualify for Medicaid even when their monthly income exceeds the $2,982 cap.
Here is how it works. Each month the applicant deposits their excess income — the amount above the Medicaid income cap — into an irrevocable trust account. The trustee then distributes the funds according to Medicaid rules — typically paying the nursing home the patient pay amount and retaining a small administrative fee. The income that goes into the trust is not counted toward the Medicaid income limit.
A QIT must be properly drafted by an attorney and must name the state Medicaid agency as the primary beneficiary of any remaining funds at the applicant’s death. Setting up a QIT typically costs $500 to $1,500 in attorney fees.
Which states require QITs?
States that use a hard income cap — called income cap states — require applicants whose income exceeds the cap to use a QIT. Approximately 37 states are income cap states. The remaining states use medically needy spend-down rules and do not use QITs.
How Income Limits Work for Married Couples
When one spouse needs nursing home care and the other remains at home the income rules work differently for each spouse.
The applicant spouse
The applicant spouse’s income is counted toward the Medicaid income limit. If their income exceeds $2,982 per month a QIT may be needed.
The community spouse
The community spouse — the spouse who remains at home — is allowed to keep their own income in most states. The community spouse’s income is generally not counted toward the applicant spouse’s Medicaid eligibility. However if the community spouse’s income is very low the applicant spouse may be allowed to divert some of their income to the community spouse through the Monthly Maintenance Needs Allowance — MMNA.
Monthly Maintenance Needs Allowance
In 2026 the minimum MMNA is $2,643.75 per month and the maximum is $4,066.50 per month. If the community spouse’s income falls below the minimum MMNA the applicant spouse can divert enough of their income to bring the community spouse up to the minimum — before contributing the remainder toward nursing home costs.
2026 Income Limits by Program Type
| Program | Standard Income Limit 2026 |
|---|---|
| Nursing Home Medicaid — most states | $2,982 per month |
| HCBS Waivers — most states | $2,982 per month |
| HCBS Waivers — some states | $994 to $1,305 per month |
| Medically Needy States | No hard cap — spend down applies |
| Medicare Savings Programs — QMB | $1,325 per month individual |
| Medicare Savings Programs — SLMB | $1,585 per month individual |
| Extra Help — Low Income Subsidy | $1,903 per month individual |
What Happens If Your Income Is Too High?
If your monthly income exceeds $2,982 and you live in an income cap state you have several options.
Option 1 — Establish a Qualified Income Trust
As described above a QIT allows excess income to be sheltered each month so that your countable income falls below the cap. This is the most common solution and works in virtually all income cap states.
Option 2 — Deduct allowable expenses
Some states allow certain expenses to be deducted from countable income including health insurance premiums Medicare Part B premiums and certain other medical expenses. Deducting these expenses may bring your countable income below the cap without needing a QIT.
Option 3 — Consider a medically needy state
If you live near a state line and have flexibility about where you receive care moving to a medically needy state eliminates the income cap problem entirely. This is a significant life decision that requires careful consideration.
Option 4 — Consult an elder law attorney
An elder law attorney familiar with your state’s Medicaid rules can identify the best strategy for your specific income situation.
Applying for Medicaid — Next Steps
If you believe you or a loved one may qualify for Medicaid long term care benefits the next steps are:
- Contact your state Medicaid agency — see our state resource pages for contact information for every state
- Contact your local Area Agency on Aging at 1-800-677-1116 or eldercare.acl.gov for free local assistance
- Consult a qualified elder law attorney — find one at naela.org
- Gather financial documents including bank statements tax returns and income statements before applying
The information in this article is for general informational purposes only and does not constitute legal or financial advice. Medicaid income limits vary significantly by state and change frequently. Always verify current figures with your state Medicaid agency or a qualified elder law attorney before making decisions about Medicaid planning.
Last updated: July 2026