Back Taxes Guides

How To Get Medicaid If You Owe Back Taxes

If you owe back taxes, you may know that you could lose some financial flexibility if the IRS files a lien against you. You may struggle to obtain new lines of credit or refinance a mortgage. Could you lose other benefits if you fail to take steps to settle back taxes? For example, can you get Medicaid if you owe back taxes?

Typically, owing back taxes does not directly affect your Medicaid eligibility criteria. However, if the discovery that you owe back taxes relates to an under-reporting of your income, this new information could affect your Medicaid application process.

Understanding Medicaid Qualifications

Even though Medicaid is primarily a federally funded program, each state monitors its own program and sets the qualifications to begin receiving Medicaid benefits. (State governments contribute some funds to their Medicaid programs, too.) Medicaid provides health insurance coverage for people who qualify. Some of the most basic Medicaid coverage requirements, regardless of your state of residence, include:

  • 65 years of age or older
  • Someone receiving Social Security income
  • Low-income individuals
  • Disabled individuals
  • Qualified children aged 18 or younger
  • Qualified pregnant women

Because of the Medicaid enrollment guidelines and rules, owing back taxes and Medicaid qualification are not directly related. This means that if you meet one of the qualification requirements, typically, you can get Medicaid if you owe back taxes.

However, each case regarding unpaid back taxes has specific parameters. You should speak with a tax resolution professional to receive assurances about how the back taxes’ impact on Medicaid eligibility fits your situation. 

How Back Taxes May Affect Medicaid

Losing (and sometimes gaining) Medicaid eligibility when you owe back taxes potentially comes into play when questions about your income occur.

Reassessing Your Income Levels

If you qualify for Medicaid because you have low income, rather than through other criteria, owing back taxes could affect your Medicaid eligibility. The IRS may claim that you owe back taxes because you did not report all your income in past years. If so, reassessing your income levels could retroactively affect your Medicaid eligibility.

If you believe the IRS is in error regarding your past income levels, you have the right to fight the claim that you now owe back taxes. You may want the legal marketing help of a tax resolution professional to argue your case. While the case is pending, it’s possible that you can maintain your Medicaid eligibility.

Levies That Affect Your Income

The IRS may place a levy on your assets or income as a consequence of owing back taxes. Such levies may reduce your income level to the point that you now qualify for Medicaid. 

It’s also possible that if you recently paid off your back taxes and removed the levies, your income level now surpasses the threshold for Medicaid eligibility. You could lose your Medicaid benefits. 

Such calculations can be difficult to make on your own. Seeking advice from a tax professional can be helpful.

Can You Get Medicaid If You Owe Back Taxes? Let Us Help You Figure Out Your Options

At Levy & Associates, Inc., we offer many services for people who need legal advice for paying back taxes. Owing back taxes can be a highly stressful situation for people. If you are worrying about whether you can get Medicaid when you owe back taxes, the stress can be especially high.

Our team takes steps to try to alleviate your worry. We can help you find the best options for paying back taxes, even when you don’t have the money available now. Call Levy & Associates, Inc. today at 800-TAX-LEVY or contact us online to discuss your situation.

Contact Levy & Associates for Dependable Tax Audit Services

Levy & Associates is available for free initial consultations. We’re happy to answer any questions you have about the audit process or address any concerns about your specific situation.

There’s never a good time to be audited, and the time-consuming process will take away from your business or family if you try to face it alone. Let us handle and coordinate communication, so you can return to your daily life.