{"id":355756,"date":"2022-10-11T13:35:36","date_gmt":"2022-10-11T18:35:36","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/elder\/elder-care-law\/long-term-care-of-elderly-the-qualified-income-trust.html"},"modified":"2026-07-01T16:42:00","modified_gmt":"2026-07-01T21:42:00","slug":"long-term-care-of-elderly-the-qualified-income-trust","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/elder\/elder-care-law\/long-term-care-of-elderly-the-qualified-income-trust.html","title":{"rendered":"Long Term Care for Older Adults: The Qualified Income Trust"},"content":{"rendered":"\n
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Long Term Care for Older Adults: The Qualified Income Trust<\/h1>\n\n
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\n By FindLaw Staff<\/a> | Legally reviewed by Melissa Bender, Esq.<\/a>\n | Last updated\n
\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n\n\n

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Key Takeaways<\/h2>\n
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The Qualified Income Trust (QIT) helps older adults in income\u2011cap states qualify for Medicaid long\u2011term care when their monthly income is too high to meet eligibility rules. By placing income into an irrevocable trust, the excess is no longer counted, allowing applicants to access Medicaid coverage for nursing homes or home\u2011 and community\u2011based services.<\/p>\n<\/div>\n<\/div>\n<\/div>\n\n <\/div>\n <\/div>\n<\/div>\n\n\n

Not everyone is eligible for Medicaid. In addition to asset limits, Medicaid recipients face income restrictions. Suppose you live in a state with a gross income cap on Medicaid eligibility. In that case, you may need to take advantage of a type of trust called a Qualified Income Trust (QIT) to qualify for Medicaid and ensure your long-term health care services are paid for.<\/p>\n

A QIT is not to be confused with a\u00a0special needs trust<\/a>, which sets aside funds for a beneficiary with a disability. Instead, a QIT allows a person whose income exceeds Medicaid’s income limits to access financial help through Medicaid.<\/p>\n

QITs must follow strict state\u2011specific rules and can be overwhelming to understand. An elder law attorney near you<\/a> can help ensure the trust is set up correctly and improve your chances of your application being approved.<\/p>\n

Medicare vs. Medicaid<\/h2>\n

Many people confuse\u00a0Medicare<\/a>, a federal program, with\u00a0Medicaid,<\/a>\u00a0a state and federal program. Medicare is an optional health insurance program available to all Americans aged 65 or older through the Social Security Administration. Your assets and income are not considered for Medicare eligibility purposes. In contrast, Medicaid is a state-run health insurance program for low-income people with limited financial means.<\/p>\n

In all states, Medicaid covers long-term nursing home care<\/a> (Long-Term Care Medicaid). \u201cWaivers” are state-specific Medicaid programs covering Home and Community-Based Services (HCBS) for people outside of nursing homes, including in-home care settings or assisted living.<\/p>\n

Long-Term Care (LTC) Medicaid is considered an entitlement program. If you qualify, you are entitled to coverage, while waivers, which cap the number of enrollees, are not. That means you might qualify for HCBS but still be unable to enroll. Waivers may also limit Medicaid services based on your location within a state or your medical diagnosis.<\/p>\n

Spend-Down States vs. Income Cap States<\/h2>\n

States differ in how they treat applicants with monthly incomes exceeding the Medicaid income limit, generally set at 300% of the Federal Benefit Rate<\/a>.<\/p>\n

In \u201cspend-down states” (also called \u201cmedically needy” states), a Medicaid applicant who is over the income limit can spend their excess income on medical and care costs. Once their income is \u201cspent down” to the Medicaid limit, they become eligible for Medicaid for the rest of the spend-down period.<\/p>\n

In contrast, \u201cincome cap” states (also known as \u201ccategorically needy” states) don’t permit applicants to spend down their excess income to become eligible for Medicaid. You can use a QIT to help reduce your monthly income to meet the Medicaid limit in such states.<\/p>\n

As of 2026, the following states are income-cap states in which QITs are an available strategy to gain Medicaid eligibility:<\/p>\n