Saturday, June 12, 2010
JUNE Food Stamp Challenge....Using Coupons with EBT/Snap
This post is part of the June Food Stamp Challenge located over HERE.
One way to make your EBT/SNAP/Food Stamps stretch further is to utilize store and/or manufacturers coupons. Every dollar you use in coupons is one more dollar that isn't used of your food stamps allotment.
Pretty basic concept,huh?
But I've read where many people who receive governmental food benefits don't realize they can combine their food stamps with coupons.
I am sure as well that there are people who use food stamps who just don't care or want to take the time to clip coupons just like in the non-food stamp using population.
But we need to get the word out to people who just don't know that you CAN use coupons with your food stamp benefits.
If you live in a state that taxes food purchases, if you pay with food stamps, you are not taxed. For example, if your state taxes food and you buy $50 of groceries and pay with cash or with a debit/credit card, you would be charged $50 + whatever the sales tax rate for your state is on that $50 purchase.
If you buy the same $50 in groceries and pay with EBT/Snap benefits, you would not be charged tax on the purchase.
However, if you use manufacturer's coupons along with your EBT/Snap benefits to pay for your groceries, you will owe CASH on the face value of the coupons at whatever the sales tax rate is for your state.
Store issued coupons on the other hand are NOT taxable.
Both types of coupons are solely an adjustment of the sales price of items and outside of the food stamp sales tax exemption.
Here's an example using my state of PA(sales tax rate of 6%)....
You buy $11 worth of eligible food.
You pay for your $11 of groceries with your EBT/Snap.
You are out of pocket no actual cash and $11 in EBT/Snap benefits for the month.
You buy $11 worth of eligible food, using $1 worth of manufacturer’s discount coupons, and $10 in
Since the sales tax is imposed on the dollar amount of the coupon, the recipient
would pay $10.06 and would therefore have to supplement the $10 in food stamps with 6¢ in cash.
If the $1 coupon is a store issued coupon/discount it's not taxed, and the recipient pays $10.
While the coupons save you some EBT/Snap credit, you do have to pay out actual cash.
If you are in a situation where you can not afford using any of your cash to cover the tax on the coupons, you may not want to use manufacturers coupons.
Personally, I don't quite understand the reasoning of how this works. You would think the government would encourage people to combine coupon use with EBT/Snap benefits so they could stretch their food credits further or be able to buy a higher quality/price of food.
Dinging someone with such low cash resources who wants to utilize coupons makes little sense to me. You would think the government would do everything in it's power to encourage thrift among it's recipients!
Perhaps we need to get the rules changed and make manufacturer's coupons exempt from sales tax when used on food stamp eligible purchases.