Last month, the US Department of Agriculture released the most recent Supplemental Nutrition Assistance Program (SNAP) payment error rates. The report found that 10.62 percent of SNAP payments in Fiscal Year 2025 (FY2025) were made incorrectly. This remains a sharp departure from average payment error rates of 6.6 percent before the pandemic (from 2017-2019). Following the substantial changes made to SNAP in the One Big Beautiful Bill Act (OBBBA), SNAP’s yearly payment errors are of particular interest. If states do not reduce these payment errors in FY2026, they will need to fund nearly $11 billion in SNAP benefit costs due to a new cost-sharing requirement.
Beginning in FY2028, states will be responsible for paying a portion of SNAP benefits issued in their state unless they achieve a SNAP payment error rate below 6 percent in either FY2025 or FY2026 (Section 10105, OBBBA). This cost-sharing requirement will continue in subsequent years, with each yearly cost share determined by the state’s payment error rate under the schedule established in the OBBBA. The newly released FY2025 rates offer a helpful indicator of the potential reach of this policy change. The vast majority of states failed to meet the payment error threshold in FY2025. Unless they improve their payment accuracy, states collectively could be required to finance up to $11 billion annually in SNAP benefit costs—a substantial increase from the current system, under which the federal government pays all SNAP benefits.
The OBBBA specifies that the cost share requirement for a particular fiscal year be based on the error rate from three years prior, using the schedule summarized in Table 1. This allows states to secure the necessary funding to cover their cost share. It also offers them a yearly chance to decrease their payment error rates which will result in lower cost shares for future years.
Source: Section 10105, OBBBA
States may choose whether their FY2028 cost share is based upon their FY2025 or FY2026 SNAP payment error rate. However, this choice ends in FY2029, and each year’s cost share will be based on the state’s payment error rates three years prior. For example, FY2029’s cost share will be based on their FY2026 payment error rate, FY2030’s cost share will be based on FY2027, and so on. Additionally, states whose payment error rates are above 13.34 percent in FY2025 or FY2026 will receive a temporary exemption from the cost share requirement. However, this temporary exemption ends in FY2030, meaning that even these high-error states will face the cost-sharing obligation in FY2030, using their FY2027 payment error rate.
If FY2025 is a guide, most states will face significant funding obligations. Figure 1 shows the breakdown of total FY2025 SNAP benefit costs in the United States that would be subject to each cost share requirement based on states’ FY2025 error rates. In other words, if FY2028 SNAP benefit costs are the same as FY2025, this figure shows the portion of total SNAP benefit costs that will be paid out by states with each possible cost share requirement, based on their FY2025 payment error rates.
Note: Reflects FY2025 SNAP benefit costs and payment error rates. Source: USDA SNAP Payment Error Rates, FY2025 and FY2025 SNAP Benefit costs.
As shown in Figure 1, if FY2028 SNAP benefit costs are the same as FY2025 levels, 42 percent of total SNAP benefit costs would be subject to a 15 percent state cost share. Another 29 percent would be subject to a 10 percent state cost share, and 12 percent would be subject to a 5 percent state cost share. Only 5 percent of SNAP benefit costs would face no state cost-sharing requirement, while the remaining 12 percent of total benefit costs would be exempt in FY2028 because of the high-error-rate transition provision. However, these states would become subject to cost sharing beginning in FY2029 or FY2030 based on their error rates in subsequent years.
If payment error rates and SNAP spending followed current patterns when the temporary exemption expires in FY2030, states would be responsible for financing an average of 12 percent of total SNAP benefit costs—approximately $11 billion annually.
Figure 2 highlights that caseload size has little relationship to payment error rates. Overall, there is no reflection of a strong relationship between a state’s SNAP caseload and its payment error rate. However, all nine states that met the 6 percent payment error threshold had relatively small SNAP caseloads, while none of the states with the largest caseloads—including California, Texas, New York, and Florida—met the threshold. At the same time, several states with relatively small caseloads, such as Alaska, Delaware, Virginia, and North Dakota, had among the highest payment error rates. This suggests that every state is unique in its ability (and inability) to control errors.
Source: USDA, FNA, FY2025 SNAP Payment Error Rates and SNAP data tables on Number of SNAP Participants by State in March 2026, the most recent month of data.
All non-green states in Figure 2 (less the temporarily exempt states) will need to finance their cost share in FY2028 unless they reduce their payment error rate for FY2026. States should roughly know their FY2026 payment error rate in the next few months, even though the official federal release of SNAP payment errors for FY2026 won’t happen until next summer. This gives states time to plan and incorporate any funding requirements into their state budget process, including any operational adjustments that allow for reductions in their payment error rates for FY2027.
Some states have suggested that they will not operate SNAP or they will temporarily suspend operations if faced with a cost share in FY2028. Others, including states and Congressional members, have recommended that Congress delay the FY2028 cost share requirement in the upcoming Farm Bill. Neither approach addresses the underlying causes of high payment error rates. Instead, they risk reducing access to nutrition assistance for eligible low-income households or increasing costs to taxpayers. A more effective approach is for states to continue improving SNAP operations to reduce payment errors. The cost-share requirement is a blunt but necessary tool to improve SNAP’s integrity and the public’s confidence in the program.
