Here are the 2016-2017 Child and Adult Food Program reimbursement rates for family child care providers. These rates will be in effect from July 1, 2016 to June 30, 2017.
For the first time in my memory, the rates overall have gone down!
Providers who receive the higher Tier I reimbursement rate (outside of Alaska and Hawaii) will receive 4 cents less per day, per child if they serve breakfast, lunch and a snack. Providers receiving the lower Tier II reimbursement rate will receive 1 cent less. That represents $10.40 or $2.60 less per child per year. Overall, this represents about a one percent decline from last year.
The reason is that reimbursement rates have always been tied to the Consumer Price Index that tracks the cost of food served at home. In the past 12 months the average food costs from across the country has gone down about 1%.
Despite this small decline providers are always better off financially by participating on the Food Program. I strongly encourage all family child care providers to join the Food Program and stay on it.
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 $1.31 Breakfast $.48
Lunch/supper $2.46 Lunch/supper $1.49
Snack $.73 Snack $.20
Tier I Alaska Tier II Alaska
Breakfast $2.09 Breakfast $.74
Lunch/supper $3.99 Lunch/supper $2.41
Snack $1.19 Snack $.33
Tier I Hawaii Tier I Hawaii
Breakfast $1.53 Breakfast $.55
Lunch/supper $2.88 Lunch/supper $1.74
Snack $.86 Snack $.23
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 2017 taxes.
For tax year 2016 use the Tier I rates in effect at the beginning of 2016: $1.32 breakfast; $2.48 lunch/supper, and $.74 snack. Alaska: $2.09 breakfast; $4.00 lunch/supper, and $1.19 snack. Hawaii: $1.54 breakfast; $2.90 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.”
Tom Copeland – www.tomcopelandblog.com