Iowa Exempt From Billion-Dollar SNAP Penalties Under New Trump Accountability Law

Under a new federal law signed by President Donald Trump, Iowa is one of nine states exempt from paying billions in new SNAP cost-sharing penalties. The law forces states with high payment error rates to shoulder a portion of benefit costs starting in 2027, rewarding efficient governments like Iowa while promoting accountability elsewhere.

How the new SNAP accountability law works

The Supplemental Nutrition Assistance Program provides monthly payments to help low-income residents buy food. A new tax-and-spending law signed by President Trump last July aims to increase accountability within the federal food aid program. Currently, the federal government fully covers SNAP benefit costs. Starting in October 2027, states with error rates of 6 percent or greater will have to pay a portion of those benefit costs.

The error rate refers to the percentage of SNAP benefits paid either above or below what people should have received, primarily because of mistakes. The new requirements are intended to increase accountability for both participants and states within the federal food aid program.

Why Iowa is exempt from SNAP cost-sharing

Data released Wednesday by the U.S. Department of Agriculture shows that nine states had error rates below 6 percent last year, securing their exemption from the cost-sharing requirement. Iowa made the cut, proving that efficient government administration protects state taxpayers from massive new liabilities.

South Dakota had the lowest error rate at approximately 2.5 percent, while Nebraska sat just below the cutoff at 5.9 percent. Other exempt states include Idaho, Kentucky, Vermont, Utah, Wisconsin, and Wyoming. While low-error states are guaranteed to owe nothing when the annual cost-sharing requirement begins, other states will have another year to try to reduce their errors.

States with high error rates face steep penalties

States that fail to manage their programs effectively will pay a steep price. Federal law sets a sliding scale for states that must contribute to SNAP benefits. States with error rates between 6 and 8 percent will eventually pay 5 percent of the benefit costs. Those with error rates between 8 and 10 percent will pay 10 percent of benefit costs. States with error rates exceeding 10 percent will have to pay 15 percent of benefit costs.

Agriculture Secretary Brooke Rollins stated that the error rates demonstrate a lack of accountability in failing states.