Deciding whether to file taxes jointly while applying for individual government benefits is a complex balancing act. Because you are 66 and living in Virginia while your wife is in North Carolina, the rules for Supplemental Security Income (SSI)and Medicaid handle your “separation” differently.
Physical separation may help you qualify for SSI, but the $70,000 in savings and the joint tax return could still pose a major hurdle for Medicaid.
1. How Separation Affects SSI
For SSI, the Social Security Administration (SSA) uses a process called “deeming.” This means they usually “deem” or count your spouse’s income and assets as yours.
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The Living Apart Rule: Once you stop living with your spouse, the SSA generally stops counting their income and assets toward your eligibility.
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The Six-Month Rule: If you were both receiving SSI as a couple, you might be treated as a “couple”" for the first six months of separation. However, since you are applying now while already living apart, the SSA should treat you as an individual starting the month after you separated.
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Impact of Joint Filing: Filing a joint tax return does not automatically disqualify you for SSI if you are physically separated, but it can be used as evidence. The SSA may ask if you are truly “separated” or just living apart temporarily. You will need to prove you are not supporting each other and have no intent to live together again.
2. How Separation Affects Medicaid (Virginia)
This is where it gets trickier. Medicaid rules for seniors (aged, blind, or disabled) in Virginia are often stricter than SSI.
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Asset Limits: In 2026, the asset limit for a single person for “regular” Medicaid in Virginia is typically $2,000.
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The Spousal Problem: Unlike SSI, Medicaid often considers a married couple’s assets to be jointly owned, even if they live in different states. Since your wife has $70,000 in savings, Medicaid may view you as having access to those funds unless you are legally separated or divorced.
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Filing Jointly: If you file a joint tax return, you are telling the government you are one “financial household.” For Medicaid, this means your wife’s assets may likely make you ineligible.
|
Feature |
SSI (Social Security) |
Medicaid (Virginia) |
|---|---|---|
|
Asset Limit |
$2,000 (Individual) |
$2,000 (Individual) |
|
Separation Status |
Stops “deeming” spouse’s assets immediately |
Often still counts spouse’s assets if not legally separated |
|
Joint Tax Return |
Generally OK, but raises “holding out” questions. |
High Risk: Likely counts spouse’s income/assets as yours |
|
The $70,000 Savings |
Ignored if living apart |
Likely disqualifies |
Important Considerations
The Obamacare Conflict
Your wife needs to file married filing jointly to get her North Carolina subsidies. However, doing so reinforces the “one household” status that Medicaid dislikes. If you file married filing separately, she will likely lose her subsidies, but you would have a much stronger case for Medicaid.
Spousal Impoverishment Rules
If you are seeking Medicaid for long-term care (like home health or nursing home care), spousal impoverishment rules allow the community spouse (your wife) to keep a large amount of assets (between $32,532 and $162,660 in 2026). If you are just seeking “regular” Medicaid for doctor visits and prescriptions, these protections usually do not apply.
Legal Definition of Separation
In Virginia and North Carolina, simply living in different houses is “physical separation.” However, for “regular” Medicaid, they may require a legal separation agreement or a court order to stop counting her $70,000 as your resource.
What Should You Do Next?
Because your wife’s tax status and your benefit eligibility are in direct conflict, you should speak with a specialist before filing your 2025 taxes.
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