Who Pays for Food Stamps? Federal vs. State Shares in 2027

Food stamps are paid for by the federal government and the states together, but not equally: the federal government covers 100 percent of the actual benefits loaded onto EBT cards, while the cost of administering the Supplemental Nutrition Assistance Program (SNAP) is split roughly 50/50 between Washington and the states. Total federal SNAP spending is projected at about $100 billion for fiscal year 2026.¹

The Federal Government Pays Every Benefit Dollar

Every dollar a SNAP recipient spends at a grocery store comes from the federal government. Federal law authorizes the Secretary of Agriculture to issue benefits to eligible households, and those benefits are redeemable “at face value by the Secretary through the facilities of the Treasury of the United States.”² States do not chip in on the food benefits themselves. When a recipient swipes an EBT card at an approved retailer, the transaction is processed against a federal account, not a state one.

Two things follow from that structure. First, the program expands automatically during recessions: when unemployment rises and more households qualify, the federal government picks up the added cost without asking states for matching funds. Second, benefit amounts do not depend on how wealthy a state is. The formula is the same nationwide, with separate calculations for Alaska, Hawaii, Guam, and the U.S. Virgin Islands. Benefit levels are set from the Thrifty Food Plan, a USDA estimate of what it costs to feed a household on a low-cost, nutritious diet, adjusted each October.³

States Split the Cost of Running the Program

While Washington covers all benefit dollars, the day-to-day work of running SNAP is a shared expense. Federal law directs the USDA to reimburse each state for 50 percent of its qualifying administrative costs through fiscal year 2026, and the state pays the other half from its own budget.⁴

State agencies handle nearly all of the public-facing work: accepting applications, verifying income and identity, interviewing applicants, and issuing benefits each month.⁵ The USDA’s Food and Nutrition Service sets national rules and monitors compliance. The costs eligible for the 50/50 split include:

Eligibility determinations, including hiring and training caseworkers who process applications and conduct interviews
Delivering benefits to approved households through the EBT system
Building and maintaining the eligibility software and data systems states use to manage cases
Investigating suspected fraud and prosecuting violations
Running the fair-hearing appeals process for applicants denied benefits or contesting their allotment
Operating the systems required to verify immigration status of applicants
Outreach and informational activities, but not advertising through television, radio, or billboards

The shared cost is meant to give both governments a financial stake in running the program efficiently. States can also recoup part of what they collect from fraud cases and overpayment recoveries, which offsets some administrative outlay.⁴

The Federal Share Is Set to Drop in 2027

Under current law, the federal reimbursement rate for administrative costs is scheduled to fall from 50 percent to 25 percent starting in fiscal year 2027.⁴ If that reduction takes effect on schedule, states would owe 75 percent of their SNAP administrative costs instead of half. That would put substantial new pressure on state budgets and could affect caseworker staffing, technology investments, and how quickly applications get processed.

Benefits themselves are not affected by that change. The federal government would still cover 100 percent of the food assistance loaded onto EBT cards; what would shift is who pays the people and systems that get those benefits out the door.

Where the Federal Money Comes From

SNAP does not have a dedicated tax. Unlike Social Security, which is funded by a specific payroll tax, food stamp benefits and the federal share of administration come out of the federal government’s general fund, which is filled by income taxes, corporate taxes, and other federal revenue. Congress allocates general revenue to the USDA each year to meet the program’s obligations.

That puts SNAP in competition for funding with defense, education, infrastructure, and every other program paid from the general fund. The Congressional Budget Office projects roughly $100 billion in total SNAP spending for fiscal year 2026, about 6 percent below the $106 billion spent in fiscal year 2025.¹ Roughly 93 percent of that goes directly to benefits. The rest covers the federal share of administrative costs, nutrition education, and employment and training programs.

How Congress Authorizes the Spending

SNAP’s legal authority comes from the Farm Bill, a large piece of legislation Congress typically reauthorizes every five years. The most recent full reauthorization was the Agriculture Improvement Act of 2018. That law expired in September 2023, Congress passed a one-year extension through September 2024, and as of early 2026 lawmakers are still operating under extensions while debating a full reauthorization. The House and Senate Agriculture Committees lead that work.

The Farm Bill is where Congress sets the fundamental rules: who qualifies, what counts as an eligible food purchase, and how benefit amounts are calculated. The general gross income cap for SNAP eligibility — 130 percent of the federal poverty level — comes from the Food and Nutrition Act.⁶

SNAP spending is not capped at a fixed dollar amount each year. Because eligibility is driven by how many people qualify rather than a set budget, the appropriations process works differently than for most programs. Economists forecast participation and per-person costs, and Congress funds the program to meet projected demand. If the economy worsens and more households fall below the income limits, spending rises automatically without Congress passing a separate emergency bill.

Employment, Training, and Quality Control

Two other pieces of the funding picture are worth knowing. SNAP funds state employment and training (E&T) programs through a three-part structure: a 100 percent federally funded base grant that requires no state match, a 50 percent federal reimbursement for administrative costs above the base grant, and a 50 percent match for allowable participant expenses like transportation and dependent care up to specified limits.⁷

The federal government also enforces payment accuracy through a quality control system. USDA reviews a sample of cases in each state to measure how accurately benefits are calculated. States whose payment error rates exceed the national average can be assessed a financial liability, and states with an error rate of 6 percent or higher (or those that fail to review at least 98 percent of their required sample) must adopt a corrective action plan.⁸ In April 2025, USDA publicly warned states about processing delays and announced stepped-up federal oversight, including monitoring teams deployed to non-compliant states.⁹ These penalties do not change who pays for benefits, but they can shift costs onto states that fall short.

The short version: if you’re asking who buys the groceries, it’s the federal government, every time. If you’re asking who pays the caseworker who approved the application, it’s the federal government and your state, roughly evenly — for now.

1
Congressional Budget Office. The Budget and Economic Outlook: 2026 to 2036
2
Office of the Law Revision Counsel. 7 U.S. Code 2013 – Establishment of Supplemental Nutrition Assistance Program
3
Food and Nutrition Service. SNAP Cost-of-Living Adjustment (COLA) Information
4
Office of the Law Revision Counsel. 7 USC 2025 – Administrative Cost-Sharing and Quality Control
5
Food and Nutrition Service. State/Local Agency
6
Office of the Law Revision Counsel. 7 U.S. Code 2014 – Eligible Households
7
eCFR. 7 CFR 273.7 – Work Provisions
8
Food and Nutrition Service. SNAP Quality Control
9
Food and Nutrition Service. USDA Demands State Accountability in SNAP