Look-Back and Gifts: How Long-Term Care Medicaid Treats Past Transfers
When someone applies for Long-Term Care Medicaid, the state does not only look at what they own today. It also looks back at what they gave away or sold in the years before applying. This section explains that review, what it can lead to, and which transfers are allowed.
Figures change periodically. Double-check current amounts before relying on them.
The short version
- Most states review the 60 months (5 years) before the application date. California is phasing in a shorter 30-month review, and New York has not yet started its planned 30-month review for home care.
- Gifts, and sales for less than fair value, made during that window can lead to a penalty period: a stretch of time when Medicaid will not pay for long-term care.
- The penalty is figured by dividing the value given away by the state’s penalty divisor, which is based on the cost of nursing home care in that state.
- Some transfers are allowed and cause no penalty, such as transfers to a spouse or to a child who is blind or disabled.
- A gift that is returned in full can remove the penalty.
Guides in this section
| Guide | What it covers |
|---|---|
| The five-year look-back, explained | What the look-back is, who it applies to, which programs use it and what the state reviews |
| How the penalty period is calculated | The penalty divisor, worked examples, when the penalty starts and 2026 divisors in several states |
| Gifts and the look-back | Small gifts, holiday and birthday money, the gift tax rule, and paying family for help |
| Transfers that are allowed (exempt transfers) | Transfers to a spouse, a disabled child, certain trusts, and the home exemptions for children and siblings |
| Curing a transfer: giving money back | How returning a gift works, full and partial returns, and the undue hardship exception |
A few figures that come up often
| Item | 2026 figure |
|---|---|
| Look-back period (most states) | 60 months (5 years) |
| Asset limit for a single applicant (most states) | $2,000 |
| Asset limit for a married couple who both apply (where the single limit is $2,000) | $3,000 |
| Federal gift tax annual exclusion | $19,000 per recipient (this does not protect a gift from the Medicaid look-back) |
| Penalty divisor | Set by each state. See your state guide |
Where to go next
If there were gifts or transfers in the last five years, working with a Certified Medicaid Planner (CMP) before applying can help avoid costly mistakes.
If you are married, the look-back works alongside the special rules for couples. See Married Couples and Long-Term Care Medicaid. If you are getting ready to apply, the How to apply for Long-Term Care Medicaid guide explains what records the state will ask for during the look-back. Each state guide lists that state’s 2026 penalty divisor.
Last updated for 2026. General information only, not legal or financial advice. Medicaid Answers is a free educational resource published by Medicaid Answers Foundation.