How do federal matching rules work for state-administered nutrition assistance programs beyond SNAP?
Executive summary
Federal matching rules vary by program: most nutrition programs already require states to set eligibility standards or match some administrative costs (for example, SNAP administrative matching is split 50/50 in many places, but federal law allows changes and some states/counties shoulder that match) [1] [2]. Recent federal legislation in 2025 (P.L. 119‑21) altered SNAP matching and administrative funding rules — reducing certain federal administrative payments to states and creating new state match pressures for benefit funding — and analysts estimate most federal savings from that match provision would come from states paying a portion of benefit costs (about $35 billion of $41 billion estimated savings) [3] [4].
1. Matching rules differ by program and by cost type
Federal “matching” is not a single rule across nutrition programs: for SNAP, federal law has traditionally borne nearly all benefit costs while sharing or capping administrative matches (USDA law limits matching on certain “new investment” administrative spending) [2]. Other programs like TEFAP require state agencies to set uniform eligibility criteria and manage distribution but do not specify a single federal match percentage in the guidance; states implement income thresholds between 185–300 percent of poverty for eligibility [5]. Medicaid-style FMAP rules apply to health programs but are listed separately and illustrate how matching formulas can vary by statute and program [6].
2. SNAP’s long-standing structure: federal benefits, shared admin costs
SNAP historically finances the food benefit itself almost entirely with federal dollars, while administrative costs have been shared and capped in statute (states historically supplied non‑federal shares for some administrative line items) [7] [2]. County-level responsibilities show that sub‑state actors can bear large shares of administrative non‑federal matching obligations in some states; Minnesota, North Carolina and New Jersey require counties to meet the full 50 percent non‑federal match for SNAP administrative funds, while other states split that obligation between state and counties [1].
3. 2025 changes reallocate funding pressure onto states
The One Big Beautiful Bill Act of 2025 (P.L. 119‑21) contains provisions that change SNAP funding: it reduces USDA’s ability to pay state administrative costs to 25% (down from 50%) beginning FY2027 and creates a provision requiring a state match for benefit funding that CBO/CRS estimated would shift roughly $35 billion of the projected $41 billion in federal savings onto states over a multi‑year window [4] [3]. Analysts warn that converting benefit funding to a state‑match model would radically change SNAP and could force states to cut benefits or rely on other fiscal offsets [8].
4. How states respond matters — and options exist
When federal policy raises state matching obligations, states respond variably: some absorb costs, some shift obligations to counties, and some change eligibility or program options to reduce expenditures (examples include county match requirements or state supplements) [1] [9]. Policy experts note that a state‑match for benefits would let states alter benefit levels or program options to manage new costs — a structural change with major distributional consequences [8].
5. Legal text and agency rules shape the practical match
Statutory language in Title 7 and USDA/FNS rulemaking set limits and permissions: statutes specify that certain “new investment” administrative amounts shall not be matched by federal funds and that states may use some federal administrative allocations for matching other federal programs under conditions [2]. Federal rulemaking implementing recent work‑requirement changes also illustrates how agencies operationalize statutory changes that affect state administrative burdens [10].
6. What reporting and cost estimates show about magnitude
CRS and CBO analyses tied to the FY2025 reconciliation law indicate the potential scale: the provision requiring a state match for benefit funding accounts for most projected federal savings — roughly $35 billion of $41 billion — signaling large fiscal shifts to states if implemented and enforced as estimated [3]. FNS implementation memoranda confirm changes to how SUA values and administrative payments will be calculated under P.L. 119‑21 [4].
7. Limitations and open questions in current reporting
Available sources document SNAP changes and TEFAP eligibility guidance, county/state share examples, and statutory text on administrative matching, but current reporting does not provide a uniform, program‑by‑program table of matching formulas across all nutrition programs; nor do these sources specify exactly how each state plans to respond to the P.L. 119‑21 match provisions at the programmatic level (available sources do not mention state-by-state decisions under P.L. 119‑21) [5] [4] [1].
Bottom line: matching rules are program‑specific and driven by statute and agency implementation; recent federal law in 2025 materially increases the risk that states — or counties inside states — will be asked to shoulder a larger share of SNAP costs, and analysts project that most federal savings from the change would come from state contributions or state actions to reduce benefits [3] [8].