Steve,

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My sister is 64 years old and has been receiving SSDI-Social Security Disabilty Income

***Do you mean SSI rather than SSDI?   SSDI gives one Medicare automatically after two years.

for many years as she is unable to work due to her disability. There is a special needs trust Nolo   Wikipedia * that my parents had included within their trust to ensure that my sister could receive some income in addition to her SSDI benefits to allow her to live more comfortably but not jeopardize her benefits. As the appointed trustee of my sister’s SNT, I am now responsible for sending her income, as my parents passed away in 2015.

There’s a rental property in the SNT that produces some income for the trust and I generated a K-1 statement for 2016 that will be taxable income on my sister’s 1040 rather than the trust’s 1041, since the trust is taxed at a much higher level. The income from this K-1 for 2016 won’t put my sister’s MAGI – Modified Adjusted Gross Income (For Covered CA subsidies) on her 1040 (Line 8b Tax Exempt Interest + Line (20a-b) Social Security Benefits + Line 37) over the limit of $16,395, which would then make her ineligible for Medi-Cal.

***That’s MAGI Medi-Cal.   There are several other ways to qualify for Medi-Cal.  I do not get paid to help people enroll in Medi-Cal.  The Medi-Cal website is a pro-bono public service.

Even if one is over the Medi-Cal limit, the way subsidies work in Covered CA, one might get Silver 94 for a very low premium.  Click here for a complementary no obligation quote.

However, I’m not certain whether there will continue to be a limitation of my sister’s MAGI on her 1040s after she reaches the age of 65 or will I be able to increase the amount of income via K-1s to help offset the taxable income incurred by the trust and not jeopardize her SSDI benefits and Medi-Cal?

***Are you sure you are not talking about SSI?

Would she automatically go on Medicare at age 65

***Does she have 10 years of work credits?   Medicare is not always automatic. Click here to enroll online.

or will she continue to receive Medi-cal-Cal?

***SSI – Supplemental Security Insurance gives Medi-Cal Automatically.

See the page on Medi-Cal redetermination.

I appreciate any advice you can provide!

***I’m not authorized to give you advise. I’m simply directing you to the tools to answer your questions.

Grant

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