Divorcing, living separately - for medicaid, must our taxes be "MFS"?

April 5, 2021 4:07 AM

My (ex)-partner and I started getting divorced in 2019, and it just got cleared by the court in early 2021. For all of 2020, we were living separately, but still legally married. Our incomes are very different - they have very, very little income, and I am comfortable (and yes, paying support!). Because of their income, when they applied for separate health insurance, they were put on medicaid. As we're planning to file our 2020 taxes, it makes financial sense to file "Married Filing Jointly", but we really, really don't want them to become ineligible for Medicaid. It seems like filing together but living separately is a grey area (slide 39) for the gov't, and may be up to the states or counties. We're in New York State (and City). Not sure whether to take the financial hit and go "Married Filing Separately" or if we're safe filing jointly this last time.
posted by anonymous to Law & Government (7 answers total)

Unfortunately you'd be considered one household if you file jointly even if you're living apart.

Maybe it's different in NY but I would be wary.
posted by tivalasvegas at 4:43 AM on April 5, 2021

Don’t rely on me — check this out further — but as I recall it, when I got divorced five years ago I found that I was permitted to file as divorced in the year when we filed, even though the divorce wasn’t final until the following year. If it solves the problem for your ex to file as single, I think that might be all right.
posted by LizardBreath at 5:38 AM on April 5, 2021

Sorry, I think I’m wrong about about that — what I’m remembering was that I was permitted to file as “head of household” rather than married before my divorce was final, but that’s a status only available to people with dependents.
posted by LizardBreath at 5:45 AM on April 5, 2021 [1 favorite]

In my state filing jointly would count your income together with your exes, and probably make them ineligible based on how you describe your level of financial comfort. You should check with a Medicaid counselor to find out if this is true for NY, they will have all the regulations and be able to answer questions about eligibility. HIICAP is a service that does insurance counseling for Medicare, Medicaid, and Medigap; you or partner can call them to ask about this.
posted by assenav at 8:51 AM on April 5, 2021

I got tangled up in a similar situation last year, and I wish I would have just bit the bullet and gotten my taxes done by a professional. I'd suggest that, they'll be able to answer this and any other subsequent questions.
posted by Sparky Buttons at 8:51 AM on April 5, 2021 [3 favorites]

I agree about considering a professional. In tricky or complex situations they often know what to do and how to file in ways that easily covers the fee.
posted by lathrop at 10:51 AM on April 5, 2021 [3 favorites]

If your spouse has included your wages with theirs on the application for Medicaid they should be fine to file joint tax return. However the IRS and Medicaid office share info quarterly so they would be aware of the joint filing which might change their eligibility.
posted by The_imp_inimpossible at 1:27 AM on April 7, 2021