CalFresh Income: What Counts and What Doesn’t

CalFresh income is the money your household is treated as receiving each month for eligibility purposes, and it includes most wages and most unearned payments before a set of exclusions and deductions is applied. For the federal fiscal year running October 2025 through September 2026, a single-person household qualifies with gross monthly income at or below $1,696, and a family of four at or below $3,483. What actually counts, though, is narrower than “everything that hits your account,” because several categories are excluded outright and several deductions come off the top before your number is compared to the limit.

What Counts as Earned Income

Earned income is compensation for work: gross wages, salaries, tips, and commissions. If you hold more than one job, all earnings are combined.¹ CalFresh looks at the gross figure, not what lands in your bank account after tax and other withholding.

Self-employment works differently. CalFresh counts your net profit, not your gross receipts. You choose one of two methods and use whichever produces the lower countable figure: subtract your actual verified business costs, or take a flat 40-percent standard deduction that avoids line-by-line documentation.² If you go with actual expenses, allowable costs include supplies, materials, workspace rent, equipment, wages paid to non-household workers, business (not commuting) transportation, and the business portion of home expenses when you regularly work from home.

What Counts as Unearned Income

Unearned income is money that arrives from somewhere other than a job. The categories that show up most often:³

Social Security retirement, survivor, and disability (SSDI) benefits. If part of your payment is being withheld to repay a Social Security overpayment, only the reduced amount counts; if withheld for any other reason, the full pre-reduction amount counts.
SSI and SSP. Since June 2019, both are fully counted as unearned income for CalFresh.⁴
Unemployment benefits and workers’ compensation, both temporary and permanent.
State disability insurance and payments from any private disability plan.
Pensions and annuities, public or private.
Child and spousal support received, including pass-through payments and the first $100 per month.
Veterans’ benefits, including Aid and Attendance.
Regular cash contributions from people outside your household.

CalWORKs, General Assistance, and other need-based public assistance also count as unearned income. Receiving them doesn’t push you out of CalFresh automatically, but the dollars go into the calculation.

What CalFresh Does Not Count

Several categories are excluded entirely. For households sitting near the income limit, these exclusions are often what makes eligibility possible.

Non-cash and in-kind help. Anything given to you in a form other than cash is excluded: free meals, donated clothing, garden produce, housing provided at no charge, WIC benefits, and similar help.⁵ The line to watch: if someone gives you diapers, that’s excluded; if someone gives you cash to buy diapers, the cash counts.

Lump sums and tax refunds. One-time, nonrecurring payments are excluded from income. That covers income tax refunds, insurance settlements, retroactive Social Security or SSI payments, security deposit refunds, and rebate checks. Earned Income Tax Credit payments are also excluded, whether at tax time or in advance.⁵ A lump sum may still be treated as a resource in the month you receive it, but it doesn’t inflate your monthly income figure.

Student financial aid. Pell Grants, Cal Grants, Supplemental Educational Opportunity Grants, federal work-study earnings, and student loans with deferred payments are all excluded. Work-study is treated as part of the aid package rather than as employment income.⁶ Private scholarships and grants used for tuition, fees, books, and supplies are also excluded.

Energy assistance and disaster relief. LIHEAP and other federal energy assistance payments are excluded. Federal disaster relief and comparable state or local disaster aid are excluded as well.⁷

Foster care payments, conditionally. A foster care payment is excluded only if the foster child is not included in your CalFresh household. If you include the child as a household member, the payment counts as unearned income. Depending on household size and the payment amount, either choice can produce the better result.⁷

Small, irregular amounts. Income is excluded if it totals $30 or less per calendar quarter and comes in too irregularly to be reasonably anticipated. Anything recurring or predictable is counted regardless of amount.⁵ Cash donations from nonprofit charitable organizations are separately excluded up to $300 per calendar quarter.

Deductions That Lower Your Countable Income

After your gross figure is set, CalFresh subtracts several deductions to reach net income. Missing a deduction you qualify for is a common way households end up over the limit on paper when they should have qualified.

Standard deduction. Every household gets one. For FFY 2026, it’s $209 per month for households of one to three, $223 for a four-person household, and higher amounts for larger households.⁸ It’s applied automatically.

Earned income deduction. Twenty percent of gross earned income is subtracted. On $2,000 in monthly wages, $400 comes off and only $1,600 continues into the income tests. It doesn’t apply to earnings that are already excluded, such as work-study.¹

Dependent care. Payments for the care of a child under 18 or an incapacitated household member, made so someone in the household can work, look for work, or attend job training, are deductible. That includes provider fees, subsidized-care co-payments, and transportation to and from the care setting. There is no cap.⁹

Shelter and utilities. This is often the biggest deduction and the one most often underclaimed. Housing costs are deductible to the extent they exceed half your income after the other deductions have been applied. Countable shelter costs include rent or mortgage, property taxes, and homeowner’s insurance. For utilities, California uses a Standard Utility Allowance of $663 per month for FFY 2026 instead of tracking individual bills; a household that pays heating or cooling costs separate from rent qualifies for the full SUA.¹⁰ For households without an elderly or disabled member, the excess shelter deduction is capped at $744 per month for FFY 2026. Households with an elderly or disabled member have no cap and can deduct the full excess.¹¹

Medical expenses for elderly or disabled members. Households with a member who is 60 or older or receives disability benefits can deduct non-reimbursed medical expenses above $35 per month. Qualifying costs include prescriptions and practitioner-approved over-the-counter medications, insurance premiums, dental care, hearing aids, prosthetics, transportation to medical appointments, and the cost of service animals.¹² A standard medical deduction of $150 is available when verified expenses fall between $35.01 and $185 per month, which spares you from documenting the exact figure inside that band. Above $185, verify the actual amount and deduct everything over $35.¹³

Child support paid. Legally obligated child support paid to or for someone outside the household is deductible, including payments toward arrears. Alimony is not included in this deduction.¹⁴

How the Income Limits Work

CalFresh applies two tests for most households: a gross income test and a net income test. Gross income is everything counted before deductions. Net income is what’s left after deductions.

Under California’s Modified Categorical Eligibility rules, which apply to most applicants, the gross income limit is 200 percent of the Federal Poverty Level, and the asset and resource test is waived. Savings and vehicle value generally won’t disqualify you.¹⁵

The net income limit is 100 percent of the Federal Poverty Level. For FFY 2026:¹⁶

1 person: $1,305
2 people: $1,763
3 people: $2,221
4 people: $2,680
5 people: $3,138
6 people: $3,596
7 people: $4,055
8 people: $4,513
Each additional person: +$459

Households where every member receives SSI or CalWORKs are categorically eligible and don’t need to meet the income or asset tests separately. Households with an elderly or disabled member skip the gross income ceiling entirely and only need to pass the net income test.⁸

A Worked Example

Here’s how the pieces stack for a working family of four with one child in daycare, using FFY 2026 figures:

Gross monthly income: $2,800 in wages
Earned income deduction (20%): −$560
Standard deduction: −$223
Dependent care: −$400
Adjusted income: $1,617
Half of adjusted income: $808.50
Total shelter costs: $1,500 rent + $663 SUA = $2,163
Excess shelter: $2,163 − $808.50 = $1,354.50, capped at $744
Net monthly income: $1,617 − $744 = $873

That $873 sits well below the $2,680 net limit for four, so the family qualifies. The benefit amount is then calculated from net income, and lower net income produces a higher monthly benefit.⁸

Reporting Income After You’re Approved

CalFresh uses semi-annual reporting. Twice a year, you receive a Semi-Annual Eligibility Report (SAR 7) asking about income, property, address, and household changes as of the fifth month of your reporting period. It’s due by the fifth of the following month; arriving after the eleventh makes it late and can delay benefits.¹⁷

Between reports, only a short list of changes must be reported within 10 days: total household income going above your assigned Income Reporting Threshold, an address change, and certain criminal justice changes. The IRT is a dollar amount set by your county, and you’ll get written notice whenever it changes. Small income fluctuations mid-period don’t need to be reported unless they push you across the IRT.¹⁸

1
California Department of Social Services. Chapter Four – Eligibility Basics
2
Santa Clara County Social Services Agency. Earned Income
3
Santa Clara County Social Services Agency. Unearned Income
4
Los Angeles County DPSS. 63-502.14 Unearned Income
5
eCFR. 7 CFR 273.9 – Income and Deductions
6
California Department of Social Services. Regulation Quick Reference – Students
7
Los Angeles County DPSS ePolicy. 63-502 Income Definition, Exclusions and Deductions
8
Food and Nutrition Service. SNAP Eligibility
9
DPSS ePolicy. 63-502 Income Definition Exclusions and Deductions
10
California Department of Social Services. All County Information Notice I-46-25
11
Food and Nutrition Service. SNAP Maximum Allotments and Deductions FY 2026
12
Alameda County Social Services Agency. 63-05.33 CalFresh Medical Deductions for the Elderly and Disabled
13
Santa Clara County Social Services Agency. CalFresh Update 2024-11 Standard Medical Deduction
14
California Department of Social Services. The Treatment of Child Support Arrearages in the Food Stamp Program
15
California Department of Social Services. CalFresh Modified Categorical Eligibility Fact Sheet
16
Food and Nutrition Service / USDA. SNAP Fiscal Year 2026 Income Eligibility Standards
17
DPSS. Semi-Annual Reporting
18
California Department of Social Services. Reporting Changes for Cash Aid and CalFresh