How will gifting to your family members impact Medicaid?
Many folks misunderstand the federal and estate gift tax rules with Medicaid rules. When it comes to federal taxes, a person is free to gift up to $15,000 per year to anyone that they would like without any penalty. This is not the case if you are qualifying for Medicaid.
Medicaid will look back 60 months to see if they have been any gifts. If there is a gift, it will be considered an uncompensated transfer of assets and the person applying for Medicaid will be subject to a penalty period.