Short answer: A Qualified Income Trust is an irrevocable trust that holds only the person’s income; income directed into it each month is disregarded when HHSC tests eligibility, so someone over the $2,982 per month 2026 cap can still qualify. The state must be named to receive what is left at death, up to what Medicaid paid.
Under HHSC policy, a QIT:
- Is irrevocable and contains only the person’s income (and accumulated income). If resources are put in, it is not a QIT. A nominal $10 to $20 can be used to open the account.
- Names the State of Texas as residuary beneficiary, up to the total Medicaid paid for the person.
- Must receive the entire income source it was set up for, in the month the income is received. The trust can be set up for one source (for example, a pension) and not another, but a trust that requires only half of a source is not valid.
Income in the trust is disregarded for the eligibility test for nursing facility and HCBS waiver Medicaid, but it still counts in figuring the person’s monthly co-payment to the facility. Payments from the trust for care are fine; cash given to the person counts as income that month.
A QIT fixes an income problem only. It does nothing for excess assets or medical necessity. HHSC sends QIT documents for legal review, and the trust should be drafted by an elder-law attorney.