I encourage all family child care providers to join the Food Program. You will always be better off financially if you do.
Some providers don’t want to join the Food Program because they will pay more in taxes or because they don’t like doing extra paperwork. Read my article, “The Three Most Common Objections to the Food Program” to see why you will always come out ahead if you join.
Tier I – All states except AK and HI Tier II – All states except AK and HI
Breakfast $1.32 Breakfast $.48
Lunch/supper $2.48 Lunch/supper $1.50
Snack $.74 Snack $.20
Tier I Alaska Tier II Alaska
Breakfast $2.11 Breakfast $.75
Lunch/supper $4.02 Lunch/supper $2.43
Snack $1.20 Snack $.33
Tier I Hawaii Tier I Hawaii
Breakfast $1.54 Breakfast $.55
Lunch/supper $2.90 Lunch/supper $1.75
Snack $.86 Snack $.24
These higher rates represent less than a 1% increase over 2014-2015. The rate increases are based on the average cost of food served in the home as reported by the Consumer Price Index.
Claiming Food Expenses
The above rates represent what you will receive in reimbursements from the Food Program. They do not represent what you can deduct as food expenses. When you claim food expenses you can use the Standard Meal Allowance Rate or an actual food cost method. See more.
If you use the Standard Meal Allowance Rate to calculate your food expenses, you will use the Tier I rate in effect at the beginning of the calendar year. Therefore, use the above Tier I rates for you 2016 taxes.
For tax year 2015 use the Tier I rates in effect at the beginning of 2015: $1.31 breakfast; $2.47 lunch/supper, and $.73 snack. Alaska: $2.09 breakfast; $4.00 lunch/supper, and $1.19 snack. Hawaii: $1.53 breakfast; $2.88 lunch/supper, and $.86 snack.
All child care providers, whether they are licensed or not, even if they receive the lower Tier II reimbursement rate, can use these higher Tier I rates to claim food expenses.
Remember to keep a daily record of all meals and snacks you serve in your business, not just the meals that you are reimbursed for by the Food Program. You are entitled to deduct as food costs on your tax return up to one breakfast, one lunch, one supper, and three snacks per day, per child, if you serve them. See my article, “How to Claim Food Expenses.”
See the announcement of these rates in the Federal Register.
Tom Copeland – www.tomcopelandblog.com