What Is a QIT Account for Medicaid Eligibility?

A Qualified Income Trust (QIT) serves as a specialized financial instrument. Its primary function involves managing income that surpasses the standard limits set for Medicaid eligibility. This particular type of trust provides a pathway for individuals to access essential long-term services, such as nursing home care or home and community-based support, by recharacterizing a portion of their income. A QIT helps ensure that necessary medical care remains accessible, even when an individual’s income would otherwise disqualify them for assistance.

Understanding Qualified Income Trusts

A Qualified Income Trust, also frequently referred to as a Miller Trust or an Income Cap Trust, is a specific type of irrevocable trust. Its core purpose is to help individuals whose monthly income exceeds the state’s Medicaid income limit for long-term care services. Many states, often called “income cap” states, set their Medicaid income limit at 300% of the Federal Benefit Rate (FBR) for individuals seeking nursing home care or home and community-based services. For example, in 2025, this limit for a single applicant is often around $2,901 per month in some states.

Individuals whose gross monthly income, which includes sources like Social Security benefits, pensions, and other regular payments, surpasses this threshold require a QIT. The trust allows the “excess” income to be deposited into a dedicated account, thereby reducing the countable income below the Medicaid eligibility limit. This mechanism is solely for income and does not address asset limits; assets cannot be placed into a QIT. This financial tool is particularly relevant for those who meet the medical necessity and resource limits for Medicaid but are over the income cap.

How a QIT Functions

The portion of the beneficiary’s monthly income that surpasses the state’s Medicaid income limit must be regularly deposited into the dedicated QIT bank account. This deposit must occur in the month the income is received, and in many cases, the entire income stream from a particular source, such as a Social Security check, must be deposited if chosen for the trust.

Funds held within a QIT can only be used for specific, permissible expenses as outlined by Medicaid regulations and the trust document. These typically include the beneficiary’s personal needs allowance, which is a small amount for personal expenses, and in some cases, a monthly maintenance allowance for a spouse. The funds can also cover medical expenses not reimbursed by Medicaid or health insurance premiums. A significant portion of the funds often goes towards the beneficiary’s “share of cost” or “patient liability” for the long-term care services received, which is the amount they are responsible for paying to the nursing facility or care provider.

A QIT includes a Medicaid payback clause. Upon the beneficiary’s death, any funds remaining in the trust must first be used to reimburse the state Medicaid agency for the benefits paid on their behalf. The state is designated as the primary beneficiary for this purpose, and it cannot recover more than the total amount of Medicaid benefits provided.

Establishing a QIT

Establishing a Qualified Income Trust is a legal procedure that benefits from the guidance of an elder law attorney. Due to variations in state-specific requirements and the irrevocable nature of the trust, professional legal assistance helps ensure compliance and proper execution. The attorney assists in drafting the formal trust document, which must include the necessary Medicaid payback clause, designating the state as the remainder beneficiary.

To initiate the process, the attorney will require specific information and documents from the beneficiary. This includes income statements, personal identification, and the chosen trustee’s information. The trustee, who cannot be the Medicaid applicant, will be responsible for managing the trust according to its terms. Once the legal document is finalized and signed, a separate, dedicated bank account must be opened in the name of the QIT. This account will exclusively hold the income directed into the trust, ensuring its segregation from other personal funds.

Managing Your QIT

Ongoing management of a Qualified Income Trust demands consistent adherence to established procedures to maintain Medicaid eligibility. The designated trustee bears the responsibility for ensuring that the required portion of the beneficiary’s income is deposited into the QIT account each month in a timely and correct manner. This monthly deposit is fundamental to keeping the beneficiary’s countable income below the Medicaid limit.

The trustee must ensure that all disbursements from the QIT account are limited to the permissible expenses outlined in the trust document and Medicaid guidelines. These authorized expenditures include the personal needs allowance, payments to the long-term care facility for the share of cost, and medical or insurance premiums. Records of all financial transactions, including deposits and expenditures, must be maintained. These records are subject to review by the state Medicaid agency, and periodic reporting is required to demonstrate ongoing compliance with program rules.