A provision that took effect the day President Trump signed the One Big Beautiful Bill Act strips a single recurring bill out of the arithmetic behind the Supplemental Nutrition Assistance Program’s biggest deduction. Households that once listed a broadband or cable bill among their shelter costs, or whose state utility allowance quietly folded internet into its flat monthly figure, no longer get either credit. Nothing about a household’s rent, income, or actual internet bill has to change for the deduction to shrink; the U.S. Department of Agriculture’s own implementation memo treats the restriction as a subtraction from an already-defined formula, not a new eligibility test.
Two Ways Internet Used to Enter the Formula
SNAP’s excess shelter deduction exists because a household with unusually high housing costs relative to its income is judged to have less money left over for food, so the program subtracts the portion of shelter costs that runs above half of a household’s income after other deductions are applied. Shelter costs feeding that formula include rent or mortgage payments plus utilities, and for years states had two ways to document the utility side: itemizing actual bills, or applying a standard utility allowance the state calculates once and assigns to every qualifying household.
Section 10104 of the law, according to the U.S. Department of Agriculture’s implementation memorandum, prohibits including internet costs in a household’s allowable shelter costs for purposes of the excess shelter deduction and separately bars internet costs from the calculation of standard utility allowances. USDA states the provision took effect upon enactment, so no phase-in period separated the old treatment of internet as an eligible cost from the new one.
For a household in a state that still requires itemized utility documentation rather than a standard allowance, the effect is immediate: an internet bill that used to add to the shelter-cost total this month no longer does, regardless of whether the household’s other utility costs rose, fell, or held steady. The deduction that results is smaller by exactly the amount the internet bill used to contribute, and a smaller deduction narrows the gap the program is built to fill.
Free download: The recertification document list, how to handle a missing benefit or skimmed card, and when to ask for a fair hearing. Download the free SNAP checklist.
The Restriction Reaches Further Through the Flat-Rate Standard
Most states do not ask households to produce itemized utility bills at all; they apply a standard utility allowance, a single dollar figure the state recalculates periodically from aggregate utility cost data and assigns to every household in a given category regardless of what any individual household actually pays. The standard allowance exists so caseworkers do not have to verify individual bills, which means a change to what counts inside it touches every household assigned to that allowance at once, not only the households that happened to itemize an internet bill on their own.
USDA’s memorandum notes that the department issued state agencies additional instructions on August 15, 2025 for calculating fiscal year 2026 standard utility allowance values, instructions that had to incorporate the internet exclusion because the fiscal year began just six weeks later, on October 1, 2025. Every standard utility allowance a state has issued since that date already reflects a figure computed without internet costs in it, meaning the restriction has been fully embedded in benefit calculations for the entire fiscal year current households are living under right now.
That timing matters because a standard allowance cannot be disputed item by item the way a household might contest a specific charge on a bill; the figure simply arrives lower than it would have been, buried inside a single number that also covers heating, cooling, electricity, and water. A household relying on the standard allowance has no separate line to point to and say internet used to be worth this much, because the allowance was never broken out that way in the first place.
USDA’s cover memorandum also extended a 120-day quality control hold-harmless window from each provision’s implementation date, shielding state agencies from being penalized on federal error-rate reviews for early miscalculations while systems were reworked. Measured from the July 4, 2025 enactment date, that cushion for the internet-cost restriction closed around early November 2025, roughly a month into the fiscal year 2026 standard utility allowance values that took effect October 1, 2025, leaving state agencies a narrow window to fix any early miscalculation before ordinary error-rate scrutiny resumed.
A Restriction With No Expiration Date Attached
Nothing in USDA’s guidance describes the internet exclusion as temporary, phased, or subject to review on any future date, unlike other provisions of the same law that carry specific fiscal year triggers or sunset language. The restriction reads as a permanent redefinition of what counts as a shelter or utility cost, applied the same way in every state and under either documentation method, itemized or standardized.
That permanence carries the exclusion forward into the fiscal year 2027 standard utility allowance values state agencies must calculate before October 1, 2026, the same annual cycle that already produced fiscal year 2026 figures computed without internet costs. Unless the underlying statute changes, every future recalculation of the excess shelter deduction, in every state, starts from a shelter-and-utility cost list that is one recurring bill shorter than it used to be.
Recalculating a Benefit After a Deduction Narrows
A shelter deduction that quietly shrinks does not arrive with a form to fill out or a caseworker call to schedule; it simply shows up as a lower benefit the next time a household’s case is calculated, often at recertification, with no dedicated notice explaining which cost stopped counting. A household that does not already track its own shelter-cost documentation separately from what the state’s system currently allows has little way to check the math on its own.
The SNAP & Medicaid Renewal Organizer is a 13-page organizer with a renewal document checklist and 51 state packs that lay out what each state currently counts at recertification, alongside a renewal and reporting calendar to track deadlines on a household’s own schedule.
Open the renewal document checklist and the renewal and reporting calendar in The SNAP & Medicaid Renewal Organizer.
This article was researched and drafted with the assistance of AI and reviewed by The Money Overview editorial team.
