A Qualified Income Trust in Texas, often called a Miller Trust, is how you qualify for Medicaid long-term care when your monthly income exceeds the state’s income cap. For 2026, that cap is $2,982 in gross monthly income for an individual. Go even a dollar over, and you’re ineligible for nursing facility Medicaid or the STAR+PLUS Home and Community Based Services waiver unless you route the excess through this trust. The mechanics are manageable once you see the pieces, but each piece has to be right.
Who Needs a Miller Trust in Texas
Texas is an income-cap state. Some states let applicants “spend down” excess income on medical bills to qualify; Texas does not. If your gross monthly income is above the limit, you’re out unless a Qualified Income Trust (QIT) is in place.
The cap equals 300% of the federal Supplemental Security Income benefit rate. With the 2026 SSI rate at $994 per month, the Medicaid income cap works out to $2,982 for an individual and $5,964 for a couple.1Social Security Administration. SSI Federal Payment Amounts for 20262Texas Health and Human Services. Appendix XII, Nursing Facility and Home and Community-Based Services Waiver Information The figure is gross, before any deductions for taxes, insurance premiums, or Medicare Part B. If a Social Security check plus a pension together clear $3,000, you’re over.
Income is only one hurdle. You also have to meet the resource limits: $2,000 in countable assets for an individual, $3,000 for a couple.2Texas Health and Human Services. Appendix XII, Nursing Facility and Home and Community-Based Services Waiver Information A home (with conditions), one vehicle, and personal belongings generally don’t count; bank and investment accounts do. A QIT fixes the income problem only. If you’re over on resources, that’s a separate conversation.
These limits apply to institutional Medicaid for nursing facility care and to the STAR+PLUS HCBS waiver, which funds care at home or in an assisted living facility.
Which Income Has To Go Into the Trust
Nearly all income counts toward the cap: Social Security retirement and disability, private pensions, annuity payments, interest, dividends, rental income, and most VA benefits. What matters is whether the money reaches you as income in a given month.
You don’t have to deposit every income source into the QIT. You can direct some sources through the trust and leave others out. But if a source goes in, the full amount from that source has to go in. You can’t split a single pension or Social Security check and put part of it in the trust. A $2,500 pension means a $2,500 deposit, not $1,500.3Texas Health and Human Services. Medicaid for the Elderly and People with Disabilities Handbook – F-6800, Qualified Income Trust
One boundary worth knowing: VA aid-and-attendance benefits, housebound allowances, and VA reimbursements for unusual or continuing medical expenses are exempt from both the eligibility calculation and the co-payment calculation. If you deposit those exempt VA benefits into the QIT anyway, they become countable for co-payment purposes even though they wouldn’t have counted otherwise.3Texas Health and Human Services. Medicaid for the Elderly and People with Disabilities Handbook – F-6800, Qualified Income Trust Keep the exempt VA portion out of the trust account.
Setting Up a Valid Trust
Under federal law and HHSC policy, a QIT in Texas has to meet four requirements:
- It must be irrevocable. Once signed, the grantor cannot cancel or alter it. If the document allows revocation, HHSC will reject it.3Texas Health and Human Services. Medicaid for the Elderly and People with Disabilities Handbook – F-6800, Qualified Income Trust
- It can hold only the beneficiary’s income. No savings, gifts, or other assets. Putting resources in breaks the trust.3Texas Health and Human Services. Medicaid for the Elderly and People with Disabilities Handbook – F-6800, Qualified Income Trust
- It must name the State of Texas to receive any funds remaining at the beneficiary’s death, up to the total Medicaid paid out for that person.4Office of the Law Revision Counsel. 42 US Code 1396p – Liens, Adjustments and Recoveries, and Transfers of Assets
- It needs a trustee, typically a family member, friend, or professional fiduciary, to manage deposits and disbursements. Naming a successor trustee is wise in case the first one can’t serve.
HHSC publishes a sample QIT document that satisfies all program requirements when completed correctly, and it’s linked from Appendix XXXVI of the Medicaid for the Elderly and People with Disabilities Handbook.5Texas Health and Human Services. Appendix XXXVI, QITs and MEPD Information Using the template is the safest route. Many families handle the paperwork themselves. Elder law attorneys typically charge between $500 and $1,500 to draft a QIT and walk the family through it.
After the trust is signed, open a dedicated bank account in the trust’s name. Start it at zero or with a small nominal deposit. The account exists only for trust income. Don’t mix in money from any other source.
Set It Up Before You Apply
You can establish the QIT before filing a Medicaid application, and that’s usually the smart play. HHSC allows the income disregard to reach back up to three months before the application date, provided every other eligibility rule was satisfied during that window.5Texas Health and Human Services. Appendix XXXVI, QITs and MEPD Information Getting the trust in place early avoids coverage gaps while HHSC works through the file.
Running the Trust Each Month
A QIT is a monthly cycle. Income goes in, authorized payments go out, the balance returns to near zero. Deposits of the designated income have to hit the QIT account during the same calendar month the income is received. Miss a month and that income counts against the cap, which can disqualify the beneficiary for that month’s coverage. In the first month the trust is established, a partial deposit is acceptable if some income was already spent before the trust existed. After that, the full amount of each designated source must go in every month, or the QIT is treated as invalid.5Texas Health and Human Services. Appendix XXXVI, QITs and MEPD Information
Once income is in the account, the trustee distributes it in a priority order set by HHSC:5Texas Health and Human Services. Appendix XXXVI, QITs and MEPD Information
- Personal needs allowance first. For an individual in a nursing facility, that’s $75 per month ($150 for a couple), used for personal items like toiletries, haircuts, and clothing.6Texas Health and Human Services. Medicaid for the Elderly and People with Disabilities Handbook – H-1500, Personal Needs Allowance
- Community spouse maintenance allowance, if the Medicaid recipient has a spouse still living at home. The federal maximum is $4,066.50 per month in 2026, though the actual figure depends on the spouse’s own income and shelter costs.7Centers for Medicare and Medicaid Services. 2026 SSI and Spousal Impoverishment Standards
- Court-ordered guardianship fees, where a court has appointed a guardian.
- Applied income, which is whatever remains, paid to the care facility as the beneficiary’s share of the cost of care.
Anything left after those payments can cover trust administration costs like bank fees. The aim each month is a balance near zero. A QIT is a conduit, not a savings account.
Taxes
The IRS treats Miller Trusts as grantor trusts under Internal Revenue Code Section 671. In practice, the trust doesn’t need its own Employer Identification Number; the trustee reports any activity using the beneficiary’s Social Security number.8Internal Revenue Service. 21.7.13 Assigning Employer Identification Numbers No separate Form 1041 is required. The income flowing through the trust already shows up on the beneficiary’s individual return.
Getting HHSC To Approve the Trust
Once the trust is signed and the account is open, send HHSC a copy of the trust document and the bank account details. You can upload through YourTexasBenefits.com, drop them at a local benefits office, or send them by mail or fax.9Texas Health and Human Services. Benefits Application Next Steps
HHSC’s legal team reviews the document to confirm the irrevocability, income-only funding, state payback language, and authorized disbursement categories are all present. If something is missing or the wording is off, HHSC sends a notice explaining what to fix. Using the HHSC sample QIT reduces the chance of rejection substantially. When the trust is accepted, HHSC issues a Notice of Case Action confirming the applicant meets income requirements.
What Happens When the Beneficiary Dies
When the QIT beneficiary dies, any money left in the trust goes to the State of Texas to reimburse Medicaid for the care it paid for, capped at what Medicaid actually spent.4Office of the Law Revision Counsel. 42 US Code 1396p – Liens, Adjustments and Recoveries, and Transfers of Assets Because the QIT should be drained to near zero every month, there’s usually very little sitting in the account itself.
The state payback inside the QIT is separate from the broader Texas Medicaid Estate Recovery Program, which can pursue reimbursement from the deceased person’s wider estate, including the home that was exempt during eligibility.10Texas Health and Human Services. Your Guide to the Medicaid Estate Recovery Program Families should understand both before assuming the home will pass to heirs free of any Medicaid claim. An elder law attorney can help limit exposure, but waiting until years into Medicaid coverage narrows the options.