Do You Have to Count Food Stamps on Your Federal Return?

by Tom Streissguth ; Updated September 11, 2015

Food stamps are a program of federal benefits that help low-income families to pay for food and basic household necessities. The program has been in operation since the 1960s, and currently serves more households than any other state or federal public-assistance program. Anyone receiving food stamps should be aware of the tax treatment of these benefits by the Internal Revenue Service.

Public Assistance

Federal law governs the food stamp program as well as income tax that is levied and collected by the IRS. The individual states administer the program, which is based on household income and the expected contribution of each household to the purchase of food and other goods. While the federal government funds the benefits, state and local governments bear about half the cost of administering the program.

IRS Treatment

The food stamp allotments made to each household are not counted as taxable income. Neither the IRS nor state or local taxing authorities may tax food-stamp benefits, according to federal law. If you receive food stamps, you do not need to declare their value on your annual tax return. The same rule applies to Medicaid, Temporary Assistance to Needy Families and Women and Infant Children benefits.

Other Taxes

In addition, retailers that accept food stamps may not charge sales tax on the purchases, even if the state normally charges tax on food items.

Credits

You may not claim food stamps, or any other form of public assistance, as income in the application for the Earned Income Credit. Nor may you count the food stamps as support provided to children, in the matter of apportioning that support for a claim for the child tax credit.

About the Author

Founder/president of the innovative reference publisher The Archive LLC, Tom Streissguth has been a self-employed business owner, independent bookseller and freelance author in the school/library market. Holding a bachelor's degree from Yale, Streissguth has published more than 100 works of history, biography, current affairs and geography for young readers.