You can give up to $19,000 annually to anyone and do not have to report it to the IRS. You can give this amount to as many people as you like. This is the annual gift tax exclusion, which changes for inflation.
Medicaid helps pay for long-term care services (e.g., nursing home care). There is an asset limit to qualify for long-term care Medicaid. If you make gifts within five years of applying for Medicaid (with exceptions), you will be ineligible for Medicaid for a period of time.
Many people believe that if they give away the annual gift tax exclusion (currently $19,000), the gift will be exempt from Medicaid’s five-year lookback; however, this is not the case. The gift tax exclusion is an IRS rule, and this IRS rule has nothing to do with Medicaid’s asset transfer rules.
Schedule an appointment to discuss strategies to protect assets from long-term care costs.
