Contest Winnings, Self-Employment Income, and Illinois Medicaid

[MidwestTech]

Alas, the Illinois medicaid application DID ask for the information. You must misunderstood it. Contest winnings are INCOME and should have been included in the section entitled "Does anyone named on this form RECEIVE money from any source other than employment?"

On the original online application, these other sources were listed as Social Security, unemployment insurance, alimony, child support, bank interest, and so on. There was an extensive list. "Contest winnings" were not on the list.

 

[LdiJ]

On the original online application, these other sources were listed as Social Security, unemployment insurance, alimony, child support, bank interest, and so on. There was an extensive list. "Contest winnings" were not on the list.

I honestly think that they were looking for regular sources of income, not a one time event. Now if you won serious money in the lottery I suspect that would be a major issue.

 

[FlyingRon]

On the original online application, these other sources were listed as Social Security, unemployment insurance, alimony, child support, bank interest, and so on. There was an extensive list. "Contest winnings" were not on the list.

The things are listing were in the parenthetical phrase beginning with "such as." Those are examples, not a list of the only things they care about.
The question as stated on the form is: "Does anyone named on this form RECEIVE money from any source other than employment?"

On the online site it is similar: "Does anyone get any other types of income or payments?" The l"tell me more" popup says "things like." The last of which is is "Other Income." Again, it's not intended to be an exhaustive list of sources of "other income."

You were obliged to report contest winnings there. You need to correct this and repay any benefits you weren't entitled to.

 

[MidwestTech]

The things are listing were in the parenthetical phrase beginning with "such as." Those are examples, not a list of the only things they care about.
The question as stated on the form is: "Does anyone named on this form RECEIVE money from any source other than employment?"

On the online site it is similar: "Does anyone get any other types of income or payments?" The l"tell me more" popup says "things like." The last of which is is "Other Income." Again, it's not intended to be an exhaustive list of sources of "other income."

You were obliged to report contest winnings there. You need to correct this and repay any benefits you weren't entitled to.

Well, I just got off the phone with Medicaid. I was told that only cash prizes should be reported to Medicaid. Gift cards, concert tickets, etc., should NOT be reported to Medicaid.

Last year, I won about $5 in cash. The other prizes were gift cards, concert tickets, etc.

This year, I have won only gift cards, except for the $1200 that I mentioned in my original post.

So, I will be reporting the $1200 to Medicaid.

I'm not going to bother reporting the $5 I won last year.

 

[PayrollHRGuy]

I was told that only cash prizes should be reported to Medicaid.

Pretty much like every person said it should be.

 

[commentator]

Realistically, you know what they are trying to ask about. Bubble gum money from Uncle Chester isn't important enough to mention. An inheritance from Uncle Chester of any decent size is. You can figure this out. Better to over inform them and let them do the deciding. The wording of a question about other sources of income isn't meant to say "Well, if this particular source of income isn't mentioned, you can leave it off." And particularly in the situation here, where there will be evidence of this income in your income taxes for this year, this is definitely something you need to discuss with them.

 

[davew9128]

Realistically, you know what they are trying to ask about. Bubble gum money from Uncle Chester isn't important enough to mention. An inheritance from Uncle Chester of any decent size is. You can figure this out. Better to over inform them and let them do the deciding. The wording of a question about other sources of income isn't meant to say "Well, if this particular source of income isn't mentioned, you can leave it off." And particularly in the situation here, where there will be evidence of this income in your income taxes for this year, this is definitely something you need to discuss with them.

An inheritance is not considered income under tax law.

 

[PayrollHRGuy]

An inheritance is not considered income under tax law.

Are you inferring that if a person receives a sizable inheritance they don't need to report the cash and continue to receive Medicaid?

 

[commentator]

Whole point is it doesn't matter whether it's "considered" income somewhere or not? When certifying for government sponsored income based programs, you must tell them to the best of your abilities about all your income, what you have lived on for the designated time period. I spent many years taking incomes for various income based programs. Our least favorite clients were those who came in and simply claimed to have been living on absolutely NOTHING for the past 6 months or the previous year. We'd have to dig, dig, dig harder to obtain tax records, check stubs, rent and utilities records, bank statements, and eventually pry some source of support from them (undeclared illegal income was usually the answer) but we were not able to certify anyone as low income unless they had some believable legitimate source of income in a sufficient amount to reasonably have supported them to some extent. Yes, this made it very tough for people who were extremely indigent and they didn't usually have good paperwork, either. And people who were living by stealing, prostitutes, moonshiners, drug dealers, etc. But we're not talking about whether or not it's considered income, the program, in order to appropriately and accurately certify him needs to know about everything he can think of and they'll decide what's includable.

 

[davew9128]

Are you inferring that if a person receives a sizable inheritance they don't need to report the cash and continue to receive Medicaid?

I said nothing of the sort. I thought my plain English was rather easy to understand since the post I responded to incorrectly stated an inheritance would be reported on a tax return. Under tax law, an inheritance is NOT income. Period. It is not disputable.

 

[Dandy Don]

There is NO IMPLICATION that the money would be received in an ongoing basis. The fact is that you received it and you could even report it as a one-time contest winning. Please be honest about what you get and stop worrying about how it will impact you. It penalizes you worse if you don't report something and they later find out about it, because they assume you are being intentionally dishonest.

 

[LdiJ]

I said nothing of the sort. I thought my plain English was rather easy to understand since the post I responded to incorrectly stated an inheritance would be reported on a tax return. Under tax law, an inheritance is NOT income. Period. It is not disputable.

What he actually stated was that there would be evidence of the inheritance on his tax return. That could be true. If the inheritance is invested then interest, dividends and capital gains/losses showing up where there were none before, or were much less before, could be evidence of a windfall at least, which is more commonly an inheritance rather than something like a lottery win. I don't think that he meant to imply that the inheritance was taxable.

And, some inherited items are taxable, like retirement funds.

 

[Taxing Matters]

I thought my plain English was rather easy to understand since the post I responded to incorrectly stated an inheritance would be reported on a tax return.

Actually, if you reread the post, he did not say an inheritance would be reported on income tax return. What he said was:

And particularly in the situation here, where there will be evidence of this income in your income taxes for this year, this is definitely something you need to discuss with them.

(Underlining added.) The "this" in his quote that I underlined refers to the income that the OP actually had, the contest winnings, which is the subject of this thread. And that will of course be reportable on the OP's income tax return. The mention about inheritance was perhaps unfortunate as the OP didn't mention any inheritance and so far as I know doesn't have an inheritance.

 

[FlyingRon]

You better get your story straight. You can try lying here and you'll probably get away with it but it won't work with the State or the courts. You specifically stated you were paypal'd CASH prizes, now you change your story and say you only got $5.

I'm outta here..

 

[MidwestTech]

You better get your story straight. You can try lying here and you'll probably get away with it but it won't work with the State or the courts. You specifically stated you were paypal'd CASH prizes, now you change your story and say you only got $5.

I'm outta here..

LAST year (2018), I won $5 in cash, and some non-cash prizes. THIS year (2019), I won the huge cash amount, and some non-cash prizes.