Working Families Tax Cut Legislation

Public Law 119-21, which CMS refers to as the "Working Families Tax Cut" (WFTC) legislation, includes significant eligibility and financing reforms in Medicaid and the Children’s Health Insurance Program (CHIP) and focuses on the connection of health to work through community engagement. Specific eligibility reforms are aimed at ensuring lawful enrollment in Medicaid and CHIP. The financing reforms are focused on ensuring that states contribute their full commitments to finance Medicaid and reducing financing loopholes. Community engagement has potential to empower Medicaid beneficiaries through employment, education, or volunteer service so they can escape isolation, build confidence, and achieve prosperity. These provisions reflect a commitment to safeguarding Medicaid and CHIP for the most vulnerable Americans now and in the future.

This webpage is home to the Center for Medicaid & CHIP Services’ (CMCS) guidance and technical assistance documents that support the implementation of the Medicaid and CHIP provisions of the WFTC legislation. CMCS expects to provide additional detailed guidance addressing specific provisions and implementation requirements. CMCS also plans to undertake rulemaking as required under the law or as otherwise warranted.

Overview Resources

• Public Law 119-21 – which CMS refers to as the “Working Families Tax Cut" legislation, was signed into law on July 4, 2025.
• WFTC Legislation CMCS Informational Bulletin – provides summary information on the Medicaid and CHIP provisions in the law.
• WFTC Legislation Overview Slide Deck – provides summary information as outlined in the WFTC Legislation CMCS Informational Bulletin.

Rural Health Transformation Program (RHTP) (Section 71401)

• See RHTP program webpage for additional information.

State Directed Payments (SDPs) (Section 71116)

• Dear Colleague Letter on Section 71116 of Public Law 119-21 (WFTC legislation)

Provider Taxes (Sections 71115 and 71117)

• Dear Colleague Letter on Section 7115 and 71117 of Public Law 119-21 (WFTC legislation)

Technical Assistance

States can email MedicaidReforms@cms.hhs.gov for technical assistance related to the Working Families Tax Cut legislation.