Medicaid nursing home coverage varies by state so it probably best to discuss with a person specializing in elder-care in her state.
however with $5000 in taxable income (?) the federal tax should be about $500. at most 85% of her social security would be taxed. perhaps more is being withheld than needed.
to POSSIBLY provide additional help we would need more information about her income and deductions. This is a public forum.
