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Understanding CalABLE Accounts

Learn about tax-advantaged CalABLE savings accounts that help individuals with disabilities save without impacting their public benefits.
Updated 10/25/2024
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For most tax filers, receiving a tax refund is a huge stress reliever—a welcome financial boost that can be used for various purposes. But for individuals receiving assistance from programs like Supplemental Security Income (SSI), there’s often a unique concern: the fear that any additional income, even a tax refund, could push them past eligibility thresholds. That’s where CalABLE accounts come into play. In this blog post, we’ll explore how CalABLE accounts can provide peace of mind by offering valuable tax benefits while safeguarding eligibility for crucial assistance programs.

ABLE (Achieving a Better Life Experience) accounts are a specialized savings account designed to help individuals with disabilities and their families save towards disability related expenses; they were created as part of the ABLE Act, and signed into law in 2014. In California, these are known as CalABLE accounts. without jeopardizing their eligibility for government assistance programs like Medicaid and Supplemental Security Income (SSI)

CalABLE accounts are a game-changer for individuals with disabilities in California. Money in a typical savings account is taken into account when applying for public benefits, such as state disability. However, earnings in a CalABLE account are 100% federal and California state tax deferred and withdrawals to pay for disability related expenses are also tax-free.

By opening a CalABLE account, eligible individuals can save up to $18,000 a year without jeopardizing their eligibility for government assistance programs like Medicaid and Supplemental Security Income (SSI). If you’re receiving Supplemental Security Income (SSI), you can have up to $100,000 in the account without it counting towards the $2,000 asset limit.

This money can be used towards disability related expenses including: rent, mortgage payments, education, property taxes, home improvement changes, transportation, health, and wellness and much more!

To qualify for an ABLE account, you or the beneficiary must meet the following criteria:

  • Have blindness or a medically determinable physical or mental impairment that causes significant functional limitations, with the condition starting before the age of 26 and lasting or expected to last at least a year.
    • Please note, that effective January 1, 2026, the age limit for eligibility for ABLE account beneficiaries from having a disability onset before age 26 to before age 46.
  • Be a U.S. citizen AND
  • Meet one of the following conditions:
    • Qualify for Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI) due to a disability.
    • Experience blindness according to the Social Security Act.
    • Provide a signed diagnosis from a licensed physician if requested.

Still unsure if you are eligible? Use this screener to find out.

You’ll need to make an initial deposit of at least $25 to get started and a $1 minimum for any contribution after that. You can save money in a cash option and/or invest it in any of the program’s investment options.

Visit CalABLE to see if you qualify and get started today!