How do CalFresh deductions (earned income, dependent care, medical, shelter) affect net income eligibility in California 2025?
Executive summary
CalFresh eligibility in California for 2025 depends on a two-step income test: households must pass gross income limits (unless elderly/disabled) and then meet a net income test after allowable deductions reduce countable income, and key deductions — earned income, dependent care, medical, and shelter (rent/utilities) — materially lower net income and therefore expand eligibility and benefit size [1] [2]. The net figure is central to both qualifying under the net-test and to the benefit formula, because the household’s maximum allotment is reduced by 30% of that net income to determine monthly CalFresh benefits [2].
1. Deductions cut countable income — the mechanics
CalFresh begins with gross monthly income, then subtracts allowable deductions to arrive at countable net income that is compared to the net-income limit (households with elderly/disabled members may use only the net test) [1] [3]. The program’s guidance and county fact-sheets reiterate that eligibility and benefit calculations hinge on this adjusted net income — not just gross earnings — and that counties will ask applicants to document allowable expenses when determining deductions [4] [5].
2. Earned income and dependent care deductions — who benefits and how
Work-related deductions reduce countable income for households with earned wages: typical CalFresh rules allow deductions for certain work expenses and childcare costs that are necessary for employment or training, and these are subtracted before the net test [2] [6]. That means parents paying for dependent care to work or attend job training can lower their net income and either become eligible or receive a larger benefit; county guidance and statewide summaries stress that many households who “think they earn too much” qualify once these deductions are applied [7] [2]. The routine caveat from county and state materials is that precise calculation requires verification of expenses and varies by household composition [4] [8].
3. Medical deductions — a special pathway for older adults and people with disabilities
Out‑of‑pocket medical expenses for household members aged 60+ or disabled are deductible against net income, and California allows either the actual verified medical costs minus the first $35 or a standard medical deduction option when paperwork is burdensome, increasing access for seniors and disabled beneficiaries [9]. Because elderly/disabled households can qualify under the net test even if they fail the gross income test, medical deductions are often decisive for that population’s eligibility [3] [9].
4. Shelter deductions and utility allowances — the biggest levers on net income
Shelter-related deductions — rent, mortgage, and utilities — can dramatically reduce net income, but federal and state rules set limits and conditions: utility allowances come in forms like the Standard Utility Allowance (SUA) and Limited Utility Allowance (LUA), and California updates SUA and related amounts annually (for example, the SUA was set for future periods in state notices) [10] [11]. Shelter deductions generally apply after other deductions are taken and, in practice, the shelter deduction only applies to the portion of housing costs that exceed half of the household’s income after other deductions, with caps for some households and special indexed adjustments for homeless households [9] [10]. These shelter and utility rules are among the most consequential because higher SUA/LUA figures or indexed homeless-shelter deductions can push net income below the eligibility threshold for many otherwise ineligible households [10] [6].
5. From net income to benefit amount — the final arithmetic and policy context
Once net income is established, CalFresh uses a standard federal formula: take the maximum allotment for the household size and subtract 30% of the household’s net income to determine the monthly benefit, so larger deductions not only open eligibility but also increase the monthly EBT amount by reducing the 30% contribution from net income [2]. California’s annual administrative updates — published by CDSS and reflected in county materials and third‑party calculators — change the numerical thresholds, utility allowances, and maximum allotments each October, meaning the real-world impact of deductions shifts year to year and requires current numbers for precise eligibility and benefit estimates [11] [6] [7]. Reporting limitations: specific deduction percentages for earned‑income and maximum shelter caps were not fully detailed across the provided sources, so exact dollar outcomes for a given household require the up‑to‑date county/CDSS figures or a benefits calculator tied to the most recent ACIN guidance [6] [11] [8].