Earnings in your CalABLE account are 100% federal and California state tax-deferred. Withdrawals to pay for disability-related expenses are federal and California state tax-free.
The assets in your CalABLE account, up to $100,000, will not affect your ability to receive state and federal benefits such as SSI (Supplemental Security Income) and Medicaid.
Plus, California residents with a CalABLE account are protected from both creditors and repayment of medical assistance. In certain situations, Medi-Cal is prohibited from filing a claim against an account after the beneficiary has died, giving individuals the full opportunity to leave a legacy for loved ones. For more information about Medi-Cal recovery, please refer to the CalABLE Disclosure Statement (PDF).
You, as the beneficiary, your family and friends can contribute up to $16,000 per year. Account owners/beneficiaries who are employed can contribute additional amounts above the $16,000 annual limit. For example, in 2022, eligible working individuals living in the 48 contiguous United States can contribute an amount equal to their current year gross income up to an additional $12,880 ($16,090 for Alaska and $14,820 for Hawaii).
If you exceed the $100,000 account balance limit, your SSI benefits would be suspended, but you'd still be eligible for all other public benefits, including Medicaid. Once your balance drops back below the $100,000 limit, your SSI benefits will resume as normal.
Meet Gabby Prieto
Gabby is a junior at her local high school and plans on going to college and pursing a job in the field of first responder work.