Do you have to pay pennsylvania state income tax if you are on Medicaid ?

My Mother is in a nursing home and was approved for Medicaid in November 2007. Prior to November, she sold off all her mutual funds to pay for her long term care. Now, it looks like she needs to pay Pennsylvania state taxes from the mutual fund sales. She has virtually no assets; that is why she is on Medicaid. Doesn't make sense that PA would approve her for Medicaid but now expect her to pay income tax.

Public Comments

1. Medicaid and income taxes are two totally separate issues. If she sold off mutual funds and had any taxable gain, the taxes are due and payable. She should have retained enough funds to pay the taxes due. If she does not, her SS benefits may be attached to pay the State income taxes due.
2. If one has income that meets the rules for paying taxes then one needs to pay their taxes.
3. The income tax is on income she had that's subject to PA tax, so yes she owes the 3.07% PA tax on her profit from the sales.