Is there a limit on how much I can gift for Medicaid Purposes?

Generally, in determining the Medicaid eligibility of a person receiving nursing facility services, any gifting of assets made by the applicant within the “look back period” will render the person ineligible for Medicaid for a period of time equal to the value of the gift divided by the regional rate.  Under current law, the look back period is the five (5) year period prior to the date of application.  A gift is defined as any transfer of assets for less than fair market value.

Many people do not realize that your everyday common gifts are captured by this widely cast net.  For instance, paying for your grandchildren’s college education, assisting a financially troubled child, and contributions to your local church are all considered gifts for purposes of determining Medicaid eligibility for nursing home care.

Often, the federal gift tax rules are mistakenly conflated with Medicaid rules.  In 2019 and 2020, the annual gift tax exclusion for federal gift tax purposes is $15,000.00.  A common misconception is that you can make annual gifts of $15,000.00 per person without incurring a penalty for Medicaid eligibility purposes.  This is incorrect.  Unlike the federal gift tax annual exclusion, there is no amount that you can gift for Medicaid purposes without incurring a penalty.

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