What Is a Qualified Income Trust (QIT) and Can It Help With Medicaid Eligibility?

Are you encountering an issue where Mom or Dad has income above the Medicaid income limit but insufficient funds to cover their skilled nursing facility bill? Three letters, Q-I-T, may be the answer to this problem.

A QIT, otherwise known as a Qualified Income Trust or Miller Trust, is a program that allows for Medicaid eligibility specifically for seniors with too high an income. It is an income cap trust funded solely for Medicaid eligibility when income exceeds the institutional limit of $2,982 in 2026. Read on to discover QIT requirements and how to set one up in this guide to Miller Trusts from the experts at Senior Planning Services.

Key Takeaways on Qualified Income Trusts (QITs)

• A Qualified Income Trust (also called a “Miller Trust”) helps individuals qualify for Medicaid long-term care benefits when their income exceeds the state’s eligibility limit.

• QITs are only available in certain states. If you live in an “income cap” state, a QIT may help access Medicaid coverage for nursing home or long-term care services.

• Income that exceeds your state’s Medicaid cap must be deposited directly into the trust each month. Only income (not assets) goes into a QIT.

• Money in the trust can only be used for specific things, including the Medicaid recipient’s share of care costs, a personal needs allowance, health insurance premiums, and spousal or dependent allowances (if applicable)

• A QIT must be properly drafted to meet state Medicaid requirements, opened with a designated trustee, and funded monthly. Legal guidance is strongly recommended to ensure compliance.

How Does a Qualified Income Trust Work?

A Qualified Income Trust (QIT), also called a Miller Trust, allows seniors to deposit a specified amount of excess income into a QIT trust. Medicaid does not count the money in the QIT as available income, provided it is used for approved expenses, such as medical bills or care costs. The funds in the trust cannot be used for personal expenses and must comply with strict state-specific rules. When the Medicaid recipient passes away, any remaining funds in the trust are used to repay the state for Medicaid costs. This setup helps people meet Medicaid income limits without losing access to care.

Qualified Income Trust Requirements

There are many detailed requirements for establishing a proper QIT, and failure to comply with any of them can render the trust invalid, jeopardizing Medicaid eligibility. If your elderly relative or friend needs a QIT, it’s important that you familiarize yourself with the details before setting one up.

Please note that Senior Planning Services are not legal professionals. This information is for helpful knowledge only and does not constitute legal advice.

Which States Allow Qualified Income Trusts?

Not all states allow the use of Medicaid Qualified Income Trusts; some use different mechanisms to reduce income for eligibility purposes. Below is a chart detailing the states that use QITs and the maximum monthly deposit amount they allow currently. 

Qualified Income Trust State Allowance Chart 

At Senior Planning, we offer Medicaid support in a number of states that offer Qualified Income Trusts.

Funding a Qualified Income Trust 

A QIT can only be funded with Mom or Dad’s income, not any other form of resources or assets.  Once income is deposited, it is not counted towards the Medicaid eligibility limit. If Mom or Dad receives more than one form of income, you can choose which income to deposit into the Miller Trust as long as the amount is enough to bring the total income below the limit.

The QIT balance must be withdrawn by the end of each month and used for approved expenses, such as health insurance premiums. If Mom or Dad resides in a nursing home, they will need to give the funds to their facility along with any other income they receive. To minimize your monthly accounting, it is simplest to set up direct deposit of income into the QIT account and automatic withdrawals for any payments out.

What Expenses Can Be Paid From a Miller Trust?

A Qualified Income Trust can pay medical expenses, including doctor visits, hospital bills, prescriptions, and health insurance premiums. It can also pay personal needs allowances, nursing home costs, and other approved Medicaid-related expenses. A QIT must only pay expenses that comply with relevant state Medicaid rules and benefit the Medicaid recipient.

How To Set up a Qualified Income Trust

Medicaid requires that the QIT account be set up irrevocably by the time Mom or Dad needs their Medicaid benefits to kick in.

When filling out the trust application, be ready to complete it with the following information:

• The beneficiary (aka Mom or Dad) whose income will be deposited into the trust. If they are incompetent, a Power of Attorney or legal guardian will need to act on their behalf.

• A grantor or trustee, such as a family member or friend, who will manage the funds and pay out expenses. 

• A successor trustee who can step in as trustee if needed.

• A distributee, who will inherit any funds left in the QIT account after the state receives its portion.

The relevant state is listed as the primary beneficiary and will receive any funds left in the QIT account upon Mom or Dad’s death, up to the amount paid out on their behalf.

There are additional technicalities regarding balance allowance, fees, and QIT account setup. Most banks are aware of these minutiae and are happy to assist you.  

Support With Setting up Your QIT at Senior Planning

Detailed logistics and tight deadlines make setting up a QIT one of the most stressful aspects of a Medicaid application. Senior Planning Services can assist you with this and any other questions you may have during this overwhelming time period. To learn how we can help you, contact us for a free consultation.

Frequently Asked Questions on Qualified Income Trusts

What is the downside of an income-only Medicaid trust?

The main downside of an income-only Medicaid trust is the loss of access to principal. 

Is a Qualified Income Trust revocable or irrevocable?

A Qualified Income Trust is irrevocable. Federal Medicaid rules require the trust to be irrevocable to qualify for benefits. Once created and funded, the grantor cannot revoke the trust or reclaim the income placed into it. 

How much does it cost to set up a QIT?

The cost to set up a Qualified Income Trust (QIT) ranges from $200 to $2,500. Attorney-drafted QITs typically cost $500 to $2,500, depending on state rules and complexity. Some states provide template forms that reduce costs to under $500. Ongoing costs include bank fees, which average $5 to $25 per month.

What happens to a QIT account when someone dies?

When someone dies, the remaining funds in a Qualified Income Trust (QIT) must first be repaid to the state Medicaid agency for benefits paid. Federal law requires the state to be the primary remainder beneficiary. If funds remain after Medicaid reimbursement, the trust distributes the balance according to the trust terms, if permitted by state law.