2016-2017 Food Program Reimbursement Rates Announced

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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.”

See the announcement of these rates here.

Tom Copeland – www.tomcopelandblog.com

Image credit: https://www.flickr.com/photos/donnieray/

Record Keeping smallFor more about reporting food program reimbursements and claiming food expenses, see the Food Program and Food Expense section of this blog and my book Family Child Care Record Keeping Guide.



Categories: Food Program and Food Expenses, Record Keeping & Taxes

10 replies

  1. Hi really sorry but I never see that I have any benefit with the food program is a pain ..
    And working with the representative too ….
    In my opinion is better all parents pay or bring food..that option I starting considered now after all this situation ..

  2. Since i claim standard meal allowance and cant count field trip meals as a deduction, can i still count meals for myself and any chaperones that went with me?

    • business meals (for yourself and clients) I think are deductible up to 50%. But you can still claim the standard rate for the kids that you feed on the field trip. I even claim them on the food program, but I pack food and bring it with. They are resturaunt meals.

    • You can never count meals you eat at home. You could use the standard meal allowance rate for meals eaten by chaperones on field trips. You could only count a meal eaten by you on a field trip if you met the test of a “business meal.” That is, the primary purpose of the meal must be business, you must keep a record of who you ate the meal with and what business topic you discussed with the chaperone.

  3. I Heard if we are “INCORPORTATED” all our meals as a provider can be claimed at $5 a meal as a deduction. Is that true? If so, how do we become “Incorporated” as a business??
    THanks
    Kathy

    • No, this is not true. Ask the person you heard this from what written IRS authority they are relying on. It doesn’t exist. Don’t incorporate.

  4. I would be willing to bet providers quit the food program en masse on October 1, 2017, when the new regulations hit. The expectations for keeping detailed records of every food served are unreasonable for a busy daycare. The food they are expecting providers to serve is far more expensive than the modest reimbursement, plus the complete failure of the KidKare software to even resemble a workable tool makes the headache not worth the effort. (If you don’t believe me, check the forums at Daycare.com about all of the people who are STILL having problems with KK after 3 years of beta testing.) I have had 3 or 4 field representatives from our food program in 1 1/2 years in operation, and they were, without exception, snobs who looked down their noses at us for being “only daycare providers.” They ding you for the slightest comma or period out of place. I had to fight to get kids covered because they came after she left but within the time frame of our serving hours. If I can have the same amount in my pocket without Big Brother looking over my shoulder and the specter of surprise visits, it’s well worth the money.

    • Food Program record keeping can be a burden. Few providers find that the cost of food under Food Program guidelines is “far more expensive” than the reimbursement, unless you are on the lower Tier II rate which was never designed to pay for all of the costs. KidKare does still have problems. It’s inexcusable that Food Program reps treated you with disrespect.

      Given all of that, however, you will not have the same amount of money in your pocket after leaving the Food Program. No way. You receive about $560 (Tier II) or $1,180 (Tier I) per child, per year from the Food Program. You would not spend that much less on food per child after leaving the Food Program. Therefore, leaving the Food Program will cost you hundreds, if not thousands of dollars of income. Make sure you understand the financial implications of your decision before you make it.

  5. The new guidelines call for brand-name lower sugar cereals, less sugar everywhere, whole grain, more fresh vegetables. All of those things are very expensive for something the kids won’t eat anyway. If I served those things to my kids, I would be throwing away over half the food. The result is that the kids are hungry all day since they refuse the food we are required to serve. Off of the program, I would be free to serve bananas, chicken nuggets, hot dogs, macaroni and cheese, peanut butter and jelly sandwiches, animal crackers, cheese crackers, all of which are foods that kids will actually eat.

    I wouldn’t be limited in the number of times I could serve a certain food each week. I don’t know where the people live that come up with the food guidelines, but I have NEVER met children who eat the foods that daycare providers are expected to serve. We got a recipe from our food program for taco casserole that included garbanzo beans, peppers and tomatoes, and my wife and I burst out laughing. Not a single one of our 11 kids would have even tried it, including my 11-year-old daughter. Anything with black flecks is rejected as “too spicy,” even if it’s just regular pepper.

    The food that they will actually eat is far cheaper than the food that will be required starting in October. I would have less food waste. I could feed leftovers (which is not allowed now, since you can only serve a certain food once a week). I could feed Kool-AId instead of 100% juice, which the kids hate anyway. There are 1000 ways to cut food costs that I am not allowed to do now because of food program rules. They may not be “nutritious” by government standards, but they fill the kids up. Judging by the school menus where my daughter attends, which are also supposed to be on the food program, they serve largely the same things I would serve without the food program.

    I raised my daughter exactly the same way I am raising these day care kids, and she is tops in her class in reading, and doing well in math, and she loves art. Obviously I was doing something right.

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