SNAP deductions: from gross income to net income

The order of the deductions

The regulation, 7 CFR 273.9(d), allows only the deductions it lists, and the order matters because the shelter deduction is measured against income after all the others. Agencies start from gross monthly income, earned and unearned. They take 20% off the earnings, then subtract the standard deduction, dependent care, child support paid and, for older or disabled members, medical costs above $35. What is left is called adjusted income. Half of adjusted income is then compared with shelter costs, and the part of shelter costs above that half is the excess shelter deduction. Adjusted income minus that deduction is net income. The benefit is the maximum allotment minus 30% of net income.

A family of four in Washington shows the chain. It has $2,800 of wages and $300 of child support received, pays $400 for child care and $1,400 in rent. The earned income deduction is $560, the standard deduction $229, child care $400. Adjusted income comes to $1,911. Rent plus the state's heating and cooling allowance makes $1,915 of shelter costs; the part above half of adjusted income is $960, capped at $769. Net income: $1,142, for an estimated benefit of $680. Without the child care cost, the benefit would be $557.

Earned income and standard deductions

Twenty percent of gross earnings comes off first. It applies to wages and self-employment income, not to Social Security, unemployment or child support received, which is why a household living on earnings gets more SNAP than one with the same total in benefits. The standard deduction applies to everyone and needs no proof. The regulation sets it at 8.31% of the net income standard for each size from one to six, rounded up to the dollar, and the fiscal year 2027 memo gives the amounts.

Dependent care, child support and medical costs

Dependent care has no cap. It covers payments for the care of a child under 18 or an incapacitated person when the care lets a household member search for, accept or keep a job, meet employment and training requirements, or attend training or education that prepares for work. Care given by a relative counts if that relative is not part of your SNAP household.

Child support paid is deducted when it is legally obligated and paid to or for a person outside the household, including vendor payments and arrears. Alimony is not included. A state may instead exclude those amounts from income; it states its choice in its plan.

Medical costs count only for a member who is 60 or older or disabled, and only above $35 a month. The regulation lists what qualifies: medical and dental care, hospital and nursing care, prescription drugs and approved over-the-counter medication, medical supplies and equipment, health insurance and Medicare premiums, Medicaid cost-sharing, dentures, hearing aids, prosthetics, prescribed eyeglasses, a seeing-eye or hearing dog, transportation and lodging to get treatment, and an attendant or home health aide needed because of age or illness. Some states replace actual costs with a standard medical deduction approved by USDA, as the FY 2027 SUA memo mentions. The SNAP for seniors guide works through an example.

The excess shelter deduction and its cap

Shelter costs are rent or mortgage payments, property taxes, insurance on the structure, and utilities: heating, cooling, electricity, cooking fuel, water, sewer, trash and phone. The deduction is whatever exceeds 50% of adjusted income. For a household without an older or disabled member it cannot exceed $769 a month in the 48 states and DC, $1,229 in Alaska and $1,036 in Hawaii, against $744, $1,189 and $1,003 in fiscal year 2026 (FY 2026 memo). A household with a member 60 or older or disabled has no cap at all. The shelter deduction is where high-rent households gain the most: in the mini-calculator above, try raising the rent until the cap kicks in.

Households in which everyone is homeless and who do not receive free shelter for the whole month can get a standard homeless shelter deduction instead, $205.66 a month in fiscal year 2027, if the state offers it. The figure printed in the regulation is older; USDA updates it every year in the COLA memo.

Standard utility allowances

Few households prove each utility bill. States set standard utility allowances instead, and the regulation lets them use three kinds: a heating and cooling standard (HCSUA) for households that pay for heating or air conditioning, a limited utility allowance (LUA) for those who pay at least two other utilities such as electricity and water, and individual standards for a single utility, most often the telephone. A household cannot use two standards that cover the same expense. The values below come from USDA's table of state allowances, which carries the fiscal year 2026 values; for fiscal year 2027 USDA let states raise them by the 3.5% rise in consumer prices, so the amounts your state applies may be slightly higher.

The gap between states is wide: the heating and cooling allowance is $1,062 in New York City and $323 for a household of three in Arizona. Each state page lists its full table.

What the 2025 law changed

Two sections of Public Law 119-21 reshaped the shelter deduction, as the USDA information memo of September 4, 2025 describes. Section 10103 ended automatic access to the heating and cooling allowance through energy assistance for most households. Only a household with an elderly or disabled member that receives more than $20 a year from LIHEAP or a similar program, in the month of application or the 12 months before, still gets the HCSUA that way; everyone else must actually incur heating or cooling costs. Third-party energy assistance under state law now stops counting as income for older or disabled households, which keep counting the costs it pays, while other households keep the income but lose the costs it covers. Section 10104 removed internet costs from shelter costs and from the allowances. Both took effect on July 4, 2025, applied to new cases at once and to current ones at recertification. To see how your own deductions add up, use the SNAP calculator.