Do my tips count as income for SNAP or Medicaid?
The short answer
What to check
Say you earn $1,100 a month in wages and $1,400 a month in tips, and you’re applying for help (illustrative).
| Program | What the federal source says | What to put down |
|---|---|---|
| Medicaid, CHIP, Marketplace savings | HealthCare.gov lists tips as income to count; eligibility uses MAGI | Wages and tips: $2,500 a month |
| SNAP | Household income is all income from whatever source, minus listed exclusions; tips aren’t excluded | Wages and tips: $2,500 a month; ask your SNAP office how it wants tips shown |
- Use your records, not a guess. Pay stubs show reported tips; your tip log shows cash tips that never hit a stub.
- For Marketplace coverage, HealthCare.gov asks for your expected income for the year you want coverage, not last year’s.
- For SNAP, the federal rule allows a deduction of 20% of gross earned income.
- Report changes the way your state agency tells you to.
Not tax or legal advice. Your state agency applies the rules to your case, so its answer is the one that counts.
Plain English
Medicaid, CHIP and the Marketplace
HealthCare.gov lists tips under the income types to count, alongside wages. It says the Marketplace uses modified adjusted gross income (MAGI) to decide if you qualify for savings, and the same number is used for Medicaid and CHIP. HealthCare.gov defines MAGI as your adjusted gross income plus any untaxed foreign income, non-taxable Social Security benefits, and tax-exempt interest.
SNAP (food stamps)
The federal SNAP income rule, 7 CFR 273.9, defines household income as all income from whatever source, excluding only the items it lists. Earned income includes all wages and salaries of an employee. The rule doesn’t use the word “tips” at all, either to count them or to exclude them, and it doesn’t start from your tax return’s adjusted gross income.
USA.gov says you must meet your state’s requirements for SNAP and that you apply through your state or local SNAP office. That office decides how to count and verify your tips.
Does the new federal tip deduction change any of this?
The IRS says the deduction is available whether you itemize or take the standard deduction, and it phases out based on MAGI. On Schedule 1-A, the deduction starts from the adjusted gross income on your Form 1040 and is subtracted after it. None of the IRS or HealthCare.gov pages we read say how the deduction affects the income used for Medicaid or Marketplace savings, so don’t assume it lowers that number. Ask the Marketplace or your state Medicaid agency.
Your state may have its own rules. For the benefits servers ask about most, see Benefits for servers.
Common mistakes
- Leaving cash tips out of an application because they’re not on your pay stub.
- Using last year’s tax return for Marketplace savings when this year’s income is different.
- Assuming the new federal tip deduction lowers your income for Medicaid.
- Guessing a monthly tip figure you can’t back up.
Official sources
Last verified:
Checked HealthCare.gov’s income page (tips listed as income to count; expected income for the coverage year) and MAGI definition, 7 CFR 273.9 as of September 1, 2026 (income from whatever source; wages and salaries; 20% earned income deduction; no mention of tips), USA.gov’s SNAP page (updated December 23, 2025), the IRS deduction page (September 21, 2026) and Schedule 1-A.
Still open: No IRS, HealthCare.gov or USDA page we found says whether the new federal tip deduction changes the income used for Medicaid, CHIP, Marketplace savings or SNAP. The federal SNAP rule doesn’t name tips; how a state counts and verifies them is up to the state agency.