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How do states handle SNAP excess shelter deductions and utility allowances in 2025 when determining benefits?
Executive summary
States calculate SNAP benefits in 2025 by deducting allowable shelter and utility costs from household income, using an “excess shelter” deduction that covers shelter costs above half of a household’s net income but is capped for most households (e.g., $712–$744 in FY2025–FY2026 for the 48 contiguous states and D.C.), while elderly/disabled households are exempt from the cap [1] [2] [3]. States also use Standard Utility Allowances (SUAs) — now standardized by a USDA rule with implementation deadlines in 2025 — and some recent federal changes (the One Big Beautiful Bill Act and USDA guidance) have altered what utilities count (including internet) and who automatically qualifies for certain heating/cooling SUAs [4] [5] [6].
1. How the “excess shelter” deduction works in practice
The core rule: after a SNAP household’s preliminary net income is calculated (gross income minus standard and other allowable deductions), the household may deduct shelter costs that exceed one-half of that net income — this is the excess shelter deduction [7]. States collect shelter expenses such as rent, mortgage interest, property taxes and some continuing ownership costs; they then add a utility allowance to non-utility shelter costs when calculating the excess shelter amount [8] [7].
2. Federal caps and special rules for elderly/disabled households
Federal law caps how much non-elderly/disabled households can claim as excess shelter; FY2025 and FY2026 materials show the cap around $712–$744 for the 48 contiguous states and D.C., while households with an elderly or disabled member may claim excess shelter costs beyond that cap [2] [3]. State manuals echo this: some states enforce their own maximum deduction amounts within those federal limits and provide operational rules for calculating and verifying shelter costs [8] [9].
3. Standard Utility Allowances (SUAs): standardizing a messy input
States commonly use SUAs to represent utility costs rather than verifying each household’s bills; SUAs are updated annually and were the focus of a USDA final rule to standardize methodology and include internet as a basic utility [10] [4]. USDA required states to implement who is eligible for heating/cooling SUAs by Jan. 17, 2025 and to finalize SUA values by Oct. 1, 2025 — meaning states had a defined window in 2025 to adopt revised SUA methods or CPI-adjusted values recommended by FNS [11] [5].
4. Recent statutory and regulatory changes that shifted state practice in 2025
Two federal developments changed the landscape in 2025. First, USDA’s SUA final rule standardized methodologies and recognized internet as a basic utility, estimating net effects (majority unchanged, ~30% small increase, ~5% small decrease) and setting deadlines for state implementation [4] [11]. Second, the One Big Beautiful Bill Act (OBBB, July 4, 2025) restricted including internet costs for the excess shelter deduction and narrowed automatic qualification for heating/cooling SUAs — for example, households automatically qualify only if they have an elderly or disabled member under one post-OBBB interpretation cited by the Center on Budget and Policy Priorities [5] [6]. USDA has been reviewing SUA rules to align with OBBB [5].
5. State variation: verification, caps, homeless rules and examples
States implement federal rules with variation: some cap shelter deductions at state-commissioned amounts (e.g., Minnesota’s manual showing a state maximum), require third-party verification for shelter expenses (Georgia guidance effective July 1, 2024), or allow homeless households a separate homeless shelter deduction and limits that differ from excess-shelter rules [9] [8] [12]. State guidance and manuals often spell out detailed steps and examples for budget calculations [8] [13] [12].
6. Practical impacts and contested policy choices
Advocacy groups warn caps blunt the shelter deduction’s aid to families and have pushed to “uncap” the deduction; FRAC and CBPP have highlighted that caps leave many low-income households with insufficient relief and criticized OBBB changes that reduce automatic SUAs for non-elderly/disabled households [14] [6]. USDA’s analysis, however, predicted modest net benefit changes overall from SUA standardization and urged states to adopt CPI adjustments to reduce disruption [4] [5].
7. Limits of available reporting and what’s not covered
Available sources provide federal caps, deadlines, and examples, and show state manuals vary, but they do not offer a complete, state‑by‑state list of 2025 SUA values, or granular data on how many households in each state gained or lost benefits after the 2025 implementation window (not found in current reporting). Also, while some memos in November 2025 affected benefit issuance broadly, the provided materials do not map those issuance changes to shelter deduction computation at the household level [15] [16] [17].
Bottom line: in 2025 states calculate excess shelter deductions by comparing shelter+utility costs (often using SUAs) to half of preliminary net income, applying federal caps for most households but not for elderly/disabled households, and implementing recent USDA and congressional changes that altered which utilities count and how SUAs are set — with variation and contestation across states as they adopted the 2025 rules [7] [2] [4] [5].