States could be forced to find hundreds of millions of dollars in additional funding to operate the Supplemental Nutrition Assistance Program (SNAP) under new federal cost-sharing requirements.

The latest Department of Agriculture (USDA) figures show that 41 states and Washington, D.C., recorded SNAP payment error rates above 6 percent in fiscal year 2025, which is the benchmark states must meet to avoid contributing toward benefit costs under the new system.

The USDA reported a national error rate of 10.62 percent for fiscal year 2025, a slight improvement from 10.93 percent in 2024. Approximately $10.1 billion in benefits were issued in incorrect amounts during the year, which includes overpayments where a recipient receives too much, and underpayments, where a recipient receives too little.

Agriculture Secretary Brooke Rollins said the error rates show "state accountability is severely lacking in SNAP" and argued that states should bear financial consequences when programs perform poorly.

The change has prompted warnings that states unable to absorb the expense could cut other services, reduce food assistance or, in extreme cases, potentially withdraw from SNAP altogether.

States Face Millions In Costs

Among states with error rates that exceed the threshold, hundreds of millions of dollars would be needed to meet the federal cost sharing requirements. In January 2026, a coalition of organizations representing governors, state legislatures, counties said that on average, states could face bills of $218 million.

Massachusetts could be required to contribute a year cost-sharing liability of nearly $300 million unless it reduces its payment error rate, according to an analysis by the Fiscal Alliance Foundation, a right-leaning think tank.

New York has a potential annual cost at well over $1 billion, while Virginia has reserved $135 million for a possible benefit contribution in fiscal year 2028.

Michigan, meanwhile, estimates that the administrative change alone will add approximately $95 million a year to its expenses. The precise figures are not directly comparable because states have used different time periods and included different parts of the law, but they illustrate the scale of the financial shift now confronting state governments.

What Is the SNAP Payment Error Rate?

SNAP, previously called the food stamp program, helps low- and no-income households purchase groceries through monthly payments loaded onto electronic benefit transfer cards. Although states administer the program, the federal government currently covers the cost of benefits. Federal and state governments generally divide administrative expenses equally.

But provisions mandated in the One Big Beautiful Bill Act (OBBBA) will alter that arrangement: beginning October 1, 2027, most states with payment error rates above 6 percent will be required to pay a portion of their SNAP benefit costs unless their performance improves.

Payment errors do not necessarily indicate fraud. The rate measures cases in which households receive either more or less than the correct benefit amount, often because of mistakes by state agencies or recipients when they apply or recertify their eligibility.

States With the Highest SNAP Error Rates

Only nine states recorded error rates below the law’s 6 percent threshold in fiscal year 2025.

South Dakota had the lowest rate nationally, at 2.47 percent. Idaho followed at 3.85 percent, with Wyoming at 3.96 percent. Kentucky reported a rate of 4.70 percent, while Iowa, Vermont, Utah, Wisconsin and Nebraska also remained below the benchmark. Nevada narrowly exceeded the threshold, with an error rate of 6.22 percent.

Alaska recorded the country’s highest rate by a wide margin with 23.15 percent, which is nearly four times the level needed to avoid cost-sharing. New Mexico had the second-highest rate, at 16.81 percent, followed by Delaware at 16 percent. Georgia recorded 15.21 percent, Illinois 14.67 percent and Oregon 14.14 percent.

Several states with the most SNAP recipients nationwide were also substantially above the benchmark. New York’s error rate was 13.18 percent, while Florida’s was 12.97 percent. Massachusetts reported 12.49 percent and Virginia 12.32 percent.

California, which operates one of the largest SNAP programs in the country, had a 10.93 percent rate, which is slightly higher than the national average.

Why Some High-Error States Get More Time

The law’s phase-in has drawn criticism because under the OBBBA, states with the highest error rates may initially have longer to comply than those with somewhat better records.

States with fiscal year 2025 rates of roughly 13.33 percent or higher receive a delayed start. States immediately below that level may be required to contribute as much as 15 percent of benefit costs sooner.

New York, for example, recorded a 13.18 percent error rate and could face an estimated $1.15 billion cost shift. Illinois, despite having a higher rate of 14.67 percent, initially qualifies for a delay.

Minnesota Senator Amy Klobuchar, a Democrat, described the arrangement as "rewarding errors." The Food Research and Action Center (FRAC) has similarly argued that the structure could weaken the immediate incentive for the worst performing states to improve.

New Jersey illustrates another consequence of the formula. The state reduced its error rate from 14.33 percent in 2024 to 6.86 percent in 2025, the largest improvement in the country. However, that progress moved New Jersey out of the delayed category and potentially exposed it to a cost share of approximately $100 million, unless it can bring its error rate down even further before the new rules come into effect.

Administrative Problems Behind Payment Errors

A 2024 Government Accountability Office report found that weak state oversight, outdated computer systems and poor recordkeeping contributed to improper SNAP payments. Audits identified benefit cards issued without authorization, inadequate documentation and limited supervisory controls.

In Maryland, auditors found that officials had mistakenly disabled a key computer-system safeguard. Of 465,038 SNAP households, 86,479 had recorded incomes above federal limits, although the state could not determine how many qualified for exemptions. Auditors called for stronger oversight of programming changes and better recovery of overpayments.

In Washington, D.C., failures in the SNAP data system led to an estimated $454,951 in overpayments, plus an unknown amount of other incorrect payments. GAO also found that some states lacked the staff and statistical expertise needed to investigate why errors occurred.

Opposition to SNAP Cost-Sharing

The Center on Budget and Policy Priorities, a left-leaning think tank, warned in an April 17 report that the requirement could impose hundreds of millions, or potentially billions, of dollars in annual expenses on the largest states.

"From October 1, 2027, most states will be required to pay a share of SNAP food benefit costs for the first time, potentially totaling hundreds of millions or even billions of dollars in new costs each year for the largest states," the report reads. "States, who must balance their budgets, will soon face painful trade-offs that would likely hurt struggling families: if they can't fully cover these costs by raising taxes or cutting other services, they'll need to further cut SNAP or potentially even withdraw from the program, terminating food assistance for all low-income people in the state."

In January 2026, a coalition of organizations representing governors, state legislatures, counties and cities asked Congress to postpone both the benefit cost-share and a higher required state contribution toward administrative costs until fiscal year 2030. It warned that the combined changes "could put SNAP in jeopardy across the country."

Using fiscal year 2024 error rates, the groups estimated that benefit cost-sharing would cost states an average of $218 million annually. The coalition also argued that every state should begin cost-sharing at the same time so performance can be judged using comparable data collected after the law’s implementation.

New York Attorney General Letitia James, a Democrat, led a separate multistate coalition in June 2026 calling on Congress to reverse or delay the requirements. The attorneys general said states could be forced to choose between cutting other essential services and reducing assistance for residents who rely on SNAP.