Arizona Medicaid Income Limits 2026: AHCCCS and ALTCS

There are two different Arizona Medicaid income limits, and which one applies to you depends on your age and whether you need long-term care.

If you are under 65 and not disabled, you are measured under MAGI, a percent-of-poverty test with no asset limit at all: 138% of the federal poverty level for adults, roughly $1,835/month for one person.1,2,3,4 If you are applying for nursing-home or in-home long-term care, Arizona runs that through a separate program, the Arizona Long Term Care System (ALTCS), on a hard $2,982/month income cap and a $2,000 asset limit.5 This guide covers both tests: the ALTCS numbers and the Income-Only Trust that rescues an over-cap applicant, and the AHCCCS MAGI limits by group, including what happens to that coverage on your 65th birthday.5,1

How ALTCS works: AHCCCS, but for long-term care

Arizona's Medicaid program is the Arizona Health Care Cost Containment System (AHCCCS, pronounced "access").

Long-term care is its own track inside AHCCCS, called ALTCS, and it is broader than the name "nursing-home Medicaid" suggests. ALTCS is for people who need a nursing-facility level of care, and its services can be provided in an institution or in a home or community-based setting. Qualifying doesn't mean moving into a nursing home: many ALTCS members live in their own homes or in an assisted living facility and receive in-home services there. That matters when a family is weighing where care happens.7

To get ALTCS, an applicant has to clear two separate gates: a medical gate (you must need a nursing-facility level of care) and a financial gate (the income and asset limits below). Clearing one without the other doesn't qualify you. The rest of this guide is about the financial gate, where most of the planning happens.5,7

The other Arizona Medicaid income limits: AHCCCS coverage under MAGI

ALTCS is the long-term-care track. The rest of AHCCCS runs on a completely different income test, and it is the one most people asking about Arizona Medicaid income limits actually need. The $2,982 cap above sits on the aged, blind, and disabled (ABD) side of AHCCCS, and specifically on its long-term-care track, ALTCS, for people who need a nursing-facility level of care.5 Everyone else, meaning adults under 65 who are not disabled, parents and caretaker relatives, pregnant women, and children, is measured under MAGI (Modified Adjusted Gross Income), a percent-of-poverty test that federal law bars states from attaching any asset test to.3,1

One mechanical difference matters before you compare yourself to any number below. Under MAGI, your household is generally your federal income-tax household (the taxpayer, their spouse, and their tax dependents) rather than everyone living under your roof; people who do not file taxes, and a few other situations, are counted under non-filer rules instead. The ABD track uses different household rules, so the same family can be counted two ways depending on which pathway applies.8

Arizona's 2026 MAGI income limits by group

AHCCCS publishes its MAGI limits as a percentage of the Federal Poverty Level, effective February 1, 2026:1

For a household of one, AHCCCS puts the Adult Group limit at $1,769/month (133% FPL) and the Caretaker Relative Group limit at $1,410/month (106% FPL).1

Those two adult figures, 133% and 138%, are the same limit, not two programs. Federal law writes the expansion adult group at 133% of the poverty line, then requires the state to disregard an amount equal to 5 percentage points of the FPL, which lifts the effective ceiling to 138%.2 AHCCCS publishes the 133% base in its policy manual; 138% is that same standard after the mandatory disregard is applied.1,2 In 2026 the effective ceiling works out to roughly $1,835/month for one person, which is 138% of the $15,960/year poverty guideline that covers the 48 contiguous states and the District of Columbia. Alaska and Hawaii have their own separate guidelines.4,2 The other percentages are the limits as AHCCCS publishes them; the disregard applies once, under the highest-standard MAGI group you could qualify for.1,2

No asset test on the MAGI track

The $2,000 asset limit in the box above belongs to ALTCS and the ABD track. It does not exist on the MAGI side: federal law bars a state from applying any assets or resources test to the MAGI groups, and expressly excepts the aged, blind, disabled, and long-term-care pathways from that bar, which is why those pathways keep a resource test and the MAGI groups do not.3

The practical version: a 55-year-old with $20,000 in savings and income under 138% FPL is judged on income, not savings, in Arizona. The same person, single and applying for ALTCS at 66 with the same $20,000, is over the resource limit. Same state, same money, different test.3,5

Parents and caretaker relatives: where a grandparent raising a grandchild would look

If you are raising a grandchild, the Caretaker Relative Group is the AHCCCS category to ask about. Whether a particular grandparent meets the state's definition of a caretaker relative turns on relationship and living-arrangement rules AHCCCS applies to your specific household, so confirm your own case with AHCCCS rather than assuming it either way. What we can give you is the number: Arizona sets the Caretaker Relative Group limit at 106% FPL, or $1,410/month for a household of one, the lowest limit of any AHCCCS MAGI group.1

That group sits low across the country for a structural reason worth knowing. Parents and caretaker relatives are a federally mandatory Medicaid group, but their mandatory floor is not a poverty-level percentage. Under 42 CFR 435.110 the lowest standard a state may set is its old AFDC cash-welfare standard in effect on May 1, 1988, converted to a MAGI equivalent; the highest is tied to the state's own 2010 or 2013 level, or its July 16, 1996 AFDC standard raised by no more than inflation.9 Children, by contrast, carry a mandatory floor of 133% FPL, a percentage of the poverty line itself.10 A floor pegged to an old welfare standard can sit far below one pegged to the poverty line, which is why the state's own published number, here 106%, is the one to check.9

There is a second door in Arizona that does not exist everywhere. Because AHCCCS runs the ACA expansion Adult Group, a caretaker relative who is under 65 and over the 106% limit is not automatically out. They can be measured against the Adult Group's 138% effective ceiling instead, with one condition: a parent or caretaker living with a child under 19 can be covered in the Adult Group only if that child has Medicaid, CHIP, or other qualifying health coverage.1,2 In a state that has not adopted the expansion, that second door is closed, and the state-set caretaker standard decides whether a working parent qualifies.9

The 65th birthday: when the MAGI pathway closes

This is the transition to plan for, and it is invisible on most income-limit charts. Federal law writes the expansion Adult Group narrowly: individuals under 65 years of age, not pregnant, and not entitled to or enrolled in Medicare, with income up to 133% FPL (138% effective) and, because it is a MAGI group, no asset test.2,3 The 2025 budget law adds a condition: by the first quarter after December 31, 2026, states must require community engagement (such as 80 hours a month of work, community service, or school) from adults in this group, with exemptions including parents and caretakers of a child 13 or under, people who are pregnant, medically frail, blind or disabled, and several other groups.2

On the 65th birthday, that pathway closes. The same person is then generally assessed under the SSI-related ABD rules, the track the statute expressly excepts from the MAGI no-asset-test rule.3 Two things change at once:

• The income yardstick changes. It stops being 138% FPL (about $1,835/month for one person) and becomes an SSI-based standard, such as the SSI Federal Benefit Rate of $994/month for an individual, or, for long-term care specifically, the $2,982 ALTCS cap covered below.6,4,5
• A resource test appears where none applied before. For ALTCS it is $2,000 for an individual, the same figure SSI uses.5,6

So a 64-year-old covered through the Adult Group at $1,600/month with modest savings can find themselves over both tests at 65 without a dollar of income changing. Which ABD category and standard AHCCCS applies depends on the situation, so treat the 65th birthday as a date to call AHCCCS about, not a formality. Medicare does the same thing early: the Adult Group excludes anyone entitled to or enrolled in Medicare, so someone under 65 who reaches Medicare through disability leaves the group the same way.2

The Arizona Medicaid income limits and the income cap

ALTCS sets its 2026 income limit at $2,982/month, which is exactly 300% of the SSI Federal Benefit Rate ($994 for 2026).5,6 The 300% figure comes from a federal matching-funds rule, but each state sets its own level, so other states' limits can differ.6

A state that runs the optional medically needy ("spend-down") pathway lets a person whose income is above its standard become eligible by incurring medical expenses at least equal to the difference.11 Arizona is an income-cap state: where ALTCS uses its 300% FBR Gross Income Test, income over $2,982 keeps you out unless you take one specific step, the Income-Only Trust.5 For ALTCS, AHCCCS's application guide (DE-828) and policy manual treat $2,982 as a gross income limit; deductions come in later, at the share-of-cost step.7

The Income-Only Trust (Arizona's Miller Trust)

An Income-Only Trust, the term Arizona uses for what most states call a Qualified Income Trust or Miller Trust, is the workaround for the income cap. It can be funded only with the applicant's income, and it helps only when ALTCS measures income with the 300% FBR Gross Income Test: AHCCCS says it cannot help an applicant qualify when the Net Income Test is used, or for any other AHCCCS program.5

AHCCCS says the trust should only be created when counted income is more than the 300% figure. Once you qualify, you may still have to pay a share of the cost of care, and your Personal Needs Allowance and certain other allowances come off your income before that share is set.5,7,3 And the trust has a condition attached: when you die, the State receives whatever remains in it, up to the total Medicaid paid on your behalf.7 The point people miss: where the gross income test applies, having "too much" income is a paperwork problem, not a disqualifier. You set up the trust and fund it each month.5

The $2,000 asset limit

Separate from income, ALTCS limits an individual applicant to $2,000 in countable assets.5 AHCCCS's chart does not publish a separate ALTCS figure for a couple who both apply, so ask AHCCCS if that is your situation.

"Countable" is the word that matters. For comparison, SSI, which uses the same $2,000 figure, does not count the home you live in, one vehicle used for transportation, or household goods and personal effects.6 Federal home-equity limits also apply: for 2026 the federal minimum is $752,000 and the maximum is $1,130,000, and the AHCCCS pages behind this guide do not state Arizona's own figure. Confirm with AHCCCS which of your assets count.5

The asset limit and the income cap are independent tests. An Income-Only Trust solves an income problem; it does nothing for assets. An applicant over the $2,000 asset limit has to reduce countable resources legitimately (spending down on the applicant's own care, the home, exempt items) rather than giving them away, which runs into the look-back below.5

The five-year look-back

ALTCS reviews asset transfers made in the 60 months before a long-term-care application.5,12 Giving away money or property for less than fair market value during that window, signing a house over to a child for a dollar, gifting a grandchild a down payment, can trigger a penalty period during which ALTCS won't pay for long-term-care services even though you otherwise qualify.

There are legitimate exceptions (transfers between spouses, transfers to a disabled child, certain caregiver-child home transfers)12 and legitimate planning approaches, but anything done inside the five-year window deserves an elder-law attorney's review first. If long-term care is on the horizon for someone in your family, talk to a professional before moving assets. For the broader toolkit, see our guide to Medicaid planning strategies.

Long-term care: what a nursing-home resident keeps

When ALTCS pays for nursing-facility care, the resident contributes most of their monthly income toward the cost of care. What they keep is the Personal Needs Allowance (PNA), money reserved for the resident's own small expenses (clothing, a haircut, a phone). Arizona sets its PNA at $149.10/month for someone who lives in a long-term-care facility for the entire calendar month, far above the $30 federal floor. For any month spent partly at home or in an HCBS setting, AHCCCS sets the PNA at 300% of the FBR ($2,982).5,3

For a resident who needed an Income-Only Trust to qualify, the PNA, any community-spouse income allowance actually given to the at-home spouse, and other allowed deductions still come off before AHCCCS sets the share of cost.5,7,3 (For the national picture on the PNA and how it's set, see our explainer on the Medicaid personal needs allowance.)

Protecting the spouse who stays home

When one spouse needs long-term care and the other remains in the community, federal spousal-impoverishment rules keep the at-home spouse from being left destitute. Arizona applies the federal figures for 2026:5

Neither the resource figure nor the need standard is an absolute ceiling: a fair hearing or a court order can raise them. The resource disregard is temporary: after up to 12 consecutive months, resources left in the applicant's name must be at or under $2,000. AHCCCS applies these spousal rules to members receiving home and community-based care, not only nursing-home care.5

After death: estate recovery

Arizona's estate recovery applies to a deceased person who received ALTCS nursing-home or home and community-based benefits at 55 or older, on or after January 1, 1994; the claim is the total ALTCS paid from age 55 on.5 Federal law allows recovery only after a surviving spouse has died and only when no child who is under 21, or blind or permanently and totally disabled, survives, and every state must offer an undue-hardship waiver.13 For how estate recovery works and where families have room to plan, see our Medicaid estate recovery explainer.

How to apply for Arizona Medicaid

Which door you use depends on which test applies to you. The steps below are the ALTCS route for long-term care; on the MAGI side (regular AHCCCS coverage), the ALTCS office and its medical review are not part of your path.7

Every ALTCS applicant has to qualify medically as well as financially: the medical side confirms a nursing-facility level of care.7 Apply even if your income is over the cap. Where ALTCS uses the gross income test, an Income-Only Trust makes being over $2,982/month a solvable problem, not a wall.5

Learn More

Find personalized help working through Arizona ALTCS eligibility and the Income-Only Trust rules for your family at brevy.com.

The information on Brevy.com is for educational purposes only and is not a substitute for professional legal, financial, or medical advice. Rules vary by state and program and change frequently. Always verify with the relevant agency or a qualified professional. Brevy is not a law firm, financial advisor, or healthcare provider.