There is a specific cruelty in the Medicaid income cap. In roughly forty states, a monthly income of $2,982 qualifies you for nursing home coverage and $2,983 does not, even though the nursing home bill is four times either figure. Nothing in between. The qualified income trust is the workaround Congress built into the statute for exactly that gap.
It is worth being clear about what it does and does not do. A qualified income trust does not reduce your income, shelter assets, protect the house, or lower what you owe the facility. It changes where your income legally sits on the first of the month so the state stops counting it. Every figure below was verified on September 6, 2026 against CMS, the federal statute, and the published policy manuals of the Texas, Georgia and Indiana Medicaid agencies.
What a Qualified Income Trust Is
The authority is 42 U.S.C. 1396p(d)(4)(B), which is why elder law attorneys call it a d(4)(B) trust. The common name, Miller trust, comes from a 1990 Colorado court case. States use both, plus “income cap trust” and “income diversion trust.”
The statute sets three conditions:
- The trust is composed only of pension, Social Security and other income to the individual, plus accumulated income in the trust. No assets. Ever.
- The state receives all amounts remaining in the trust at death, up to the total medical assistance Medicaid paid on the person’s behalf.
- The state uses the special income level pathway but does not make Medicaid available for nursing facility services through a medically needy pathway.
That third condition is the one people miss. The trust is not a national tool. It exists only in states whose Medicaid programs are built a particular way.
State manuals add operating requirements on top. Texas requires the trust be irrevocable and contain only the person’s income, and notes that banks may take a nominal $10 to $20 deposit to open the account without invalidating it. Georgia’s policy adds that the trust cannot be backdated, that it is effective only from the month it is completed and signed, that a QIT established in another state cannot be used to qualify in Georgia, and that a trust can cover only one individual, never a couple.
Only Income-Cap States Use Them
Whether you need one depends on a structural feature of your state’s Medicaid program, not on anything about you.
| Income-cap state | Medically needy state | |
|---|---|---|
| Income test | Hard ceiling of $2,982/mo in 2026 | Lower dollar limit you reach by deducting medical bills |
| One dollar over the limit | Denied outright | Still eligible after spend down |
| The fix | Qualified income trust | Incur medical expenses during a 1 to 6 month budget period |
| Trust required? | Yes, if over the cap | No |
KFF’s March 2026 survey found 41 states using the special income rule for both institutional and home-based long-term care, plus Massachusetts for home care only, and 34 states with a medically needy pathway, 32 of which extend it to older adults and people with disabilities. Some states run both structures, which is why the count does not resolve neatly into two lists.
States with published qualified income trust programs include Texas, Ohio, Georgia, Indiana and Florida. If your state is not one of those, do not assume either way. Call the state Medicaid agency, or the local Area Agency on Aging, and ask one question: does this state require a qualified income trust for nursing home Medicaid, or does it have a medically needy spend down. The answer determines everything else.
How the Account Works Month to Month
Mechanically it is a bank account with rules, and the rules are unforgiving about timing.
Set up. An irrevocable trust document is signed naming a beneficiary (the applicant), a trustee (usually a family member), a successor trustee, and the state as remainder beneficiary. A dedicated bank account is opened in the trust’s name. Georgia allows the applicant, a court-appointed guardian or conservator, or an attorney-in-fact under a power of attorney with that authority to establish it. A nursing home may serve as trustee but may not establish the trust.
Deposit, every month, on time. Income is deposited during the calendar month it is received. Texas is explicit that any non-exempt income source not directed to the account during the month of receipt is countable income for that month. States differ on plumbing: Texas allows direct deposit into the trust, while Georgia requires the income be transferred in from another account rather than deposited directly by Social Security.
A whole income source, not a slice. Texas rejects a trust that directs only half of a pension. You can choose which income sources to route through the trust, but each source you choose goes in entirely.
Pay out, in order. Georgia’s manual lists the only allowable disbursements: the patient liability or cost share to the facility, the personal needs allowance, diversion to a community spouse or dependent children, medical expenses of the community spouse, and other medical expenses not covered by Medicaid. That mirrors the federal post-eligibility deductions in 42 CFR 435.725, which protects a personal needs allowance of at least $30 a month before anything else. KFF put the 2026 median personal needs allowance at $70 for institutional care, with 13 states raising theirs this year.
Empty it. The account is meant to run to roughly zero each month. Payment of the patient liability must be made by the end of the month following the month the income was received, per Georgia policy. Anything else drawn out of the trust may be counted as income to the applicant all over again.
The practical setup that avoids most errors is direct deposit in and standing automatic payments out, so no human has to remember a date.
What It Costs to Set Up
There is a real range here, and the bottom of it is zero.
| Route | Typical cost | Notes |
|---|---|---|
| Free state agency template | $0 | Indiana, Ohio and Georgia publish forms and instructions |
| Online document preparation | about $495 flat | Published fee for a Florida QIT document service |
| Elder law attorney | $500 to $2,500 | Varies by state rules and complexity |
| Bank account fees | $5 to $25 per month | Ongoing, for the life of the trust |
Indiana’s Family and Social Services Administration hosts a Miller trust template alongside detailed and short-form instructions, guidance for banks, and separate materials for nursing facilities. Georgia and Ohio publish their own. Those pages are the first place to look, and the state’s own template is the version its eligibility workers already know how to approve.
The case for paying an attorney is not the document. It is everything around it: whether you actually need a trust, whether a spouse’s allowance changes the math, whether transfers in the last five years have created a separate problem under the look-back period, and whether the trust is signed and funded before the month you need coverage to start. Georgia’s no-backdating rule means a week of delay can cost a month of Medicaid.
The State Must Be the Remainder Beneficiary
This is not a detail buried in fine print. It is condition two of the statute. At death, the state gets everything left in the trust, up to the total Medicaid paid on the person’s behalf.
In practice a well-run trust holds very little at any moment, since it empties monthly. What accumulates are the odd balances from months when the full patient liability was not owed, for example a hospitalization month or a month Medicare covered the stay. Texas notes those accumulated funds are not a countable resource and do not create a transfer-of-assets problem.
Do not confuse this payback with Medicaid estate recovery, which reaches probate assets. The trust payback is a separate, automatic claim written into the trust itself.
Underfunding and Overfunding
Underfunding is the failure mode that ends coverage.
Georgia defines proper funding as depositing at least enough to bring countable income below the state cap, and timely funding as doing so before the end of the month for which eligibility is requested, or by the last day of the following month for ongoing cases. Miss it and eligibility is lost for that month. Texas is harsher on the back end: for an active recipient, the state requests restitution equal to the vendor payment for any month the person was income-ineligible.
There is one grace period. Texas allows a partial deposit in the initial month a trust is established, on the reasoning that some income may already have been spent before the account existed, as long as the full income source is deposited from the following month forward.
Overfunding is the smaller problem. Depositing more than the excess is generally allowed and often recommended: Georgia’s manual says it is preferable to deposit all of the applicant’s income if possible, because it removes the risk of a miscalculation dropping you back over the cap. The money is not lost, it just flows back out to the facility as patient liability. What you cannot do is put a resource in. A single non-income deposit, such as a transfer from an existing savings account, can invalidate the trust entirely under both Texas and Georgia policy.
Who Needs One and Who Does Not
You probably need one if you live in an income-cap state, your gross monthly income exceeds $2,982 in 2026, and you need Medicaid to pay for a nursing facility or a home and community-based waiver.
You do not need one if your income is under the cap, if you live in a medically needy state where you can spend down instead, or if your problem is assets rather than income. Assets are a different rule set, covered in our guide to Medicaid spend down. A qualified income trust does nothing about a bank balance over $2,000.
It also does not help with a transfer penalty, with Medicare’s very limited nursing home coverage (see does Medicare cover long-term care), or with assisted living in states that do not cover it (see does Medicaid pay for assisted living).
The Bottom Line
If your income is over the cap in a state that uses one, the qualified income trust is not optional and there is no substitute. Get the state’s own template, sign it and open the account before the month you need coverage, deposit on time every month, and pay out only what the state’s rules allow.
For everything the trust does not solve, the wider set of options is in how to pay for a nursing home, and current private-pay figures are in our nursing home cost guide. If Medicare premiums are eating the income you are trying to route, check Medicare Savings Programs first.
The $2,982 cap is the 2026 figure published by CMS and it moves every January with the SSI federal benefit rate, so confirm the current number with your state Medicaid agency before you draft anything.