What deductions are allowed when calculating net income for 2025 SNAP eligibility?
Executive summary
For SNAP net-income calculations in the 2025–2026 period, federal rules continue to allow a 20% earned income deduction, a standard deduction (raised to $204 for households of 1–3 in the contiguous U.S.), and deductions for shelter (subject to a $712 cap in the 48 states and D.C.), utilities, dependent care, and certain medical expenses for elderly/disabled members [1] [2] [3]. States administer the program and may apply Broad-Based Categorical Eligibility or other flexibilities that affect which deductions and thresholds actually determine an applicant’s net income [4].
1. What “net income” means and why deductions matter
Net income is gross income after allowable deductions and is the figure compared to the net income limit to determine SNAP benefit size; households generally must meet both a gross- and a net-income test unless exempted (for example, elderly/disabled households) [1] [4]. The USDA’s FY2025 guidance and COLA materials define which deductions are routinely applied and set caps that materially alter what counts as net income [1] [5].
2. The standard and earned-income deductions: the two automatic cuts
All households may claim the standard deduction; for FY2025 the standard deduction for households of 1–3 increased to $204 per month in the 48 states and D.C., reflecting the cost-of-living adjustment [2] [5]. The program also allows a 20% deduction from earned income before other deductions are applied — a predictable, headline deduction that lowers countable earnings [1] [6].
3. Shelter, utilities and dependent-care: large, often decisive deductions
Households may deduct allowable shelter and utility costs and out‑of‑pocket dependent care expenses; those deductions frequently make the difference between eligibility and ineligibility. USDA guidance sets a shelter deduction cap — $712 for the 48 states and D.C. under FY2025 COLA rules — and there is a separate maximum for the homeless shelter deduction ($190.30) [2] [5]. State practice and household circumstances determine how big an effect these deductions have on net income [2].
4. Medical and special rules for elderly or disabled households
Households with members who are elderly or disabled can claim medical expenses not covered by insurance; federal guidance treats these households differently for income tests and deductions, and the USDA updates the special-rules page with OBBBA changes [6]. The precise treatment of medical deductions and how they feed into net-income calculations is set out in the special-rules materials and the FY2025 COLA documents [6] [5].
5. State discretion and Broad-Based Categorical Eligibility (BBCE)
While federal rules list allowed deductions and set caps, states have administrative leeway — for example, many states use Broad-Based Categorical Eligibility to relax income or asset tests and to adopt more generous vehicle or shelter policies. That state-level discretion means two households with identical finances in different states can see different net-income outcomes [4].
6. Practical impacts: why small differences add up
The combination of the 20% earned income deduction, a larger standard deduction ($204 for small households), and capped but meaningful shelter and medical deductions can substantially reduce countable income and increase benefits for households with high housing or care costs. Analysts at CBPP and USDA tables show how those deductions are central to benefit calculations and to whether households cross the net-income threshold [4] [7].
7. Where coverage in the sources stops and what to watch next
Available sources document the major deduction categories, the FY2025 COLA figures (including the $204 standard deduction and $712 shelter cap), and special rules for elderly/disabled households, but they do not provide an exhaustive line-by-line worked example for every state or the post-OBBBA mechanics for every deduction at recertification [2] [6] [5]. For exact, state‑specific net-income outcomes and recent procedural changes, state SNAP offices’ pages and the USDA’s detailed FY2025 income standards table are the operative references [7] [8].
8. Bottom line for applicants and advocates
Claim the automatic 20% earned income deduction and standard deduction, document shelter, utility, dependent care and — for elderly/disabled households — medical costs, and check how your state applies BBCE or other flexibilities. The federal guidance (USDA COLA and eligibility pages) sets the floor, but state rules and caps determine the final net-income number that governs eligibility and allotment size [1] [2] [4].