The 2017-2018 Child and Adult Food Program reimbursement rates for family child care providers have just been released. These rates will be in effect from July 1, 2017 to June 30, 2018.
For all states except Alaska and Hawaii, there is no change in the higher Tier I rates from last year. There is a one cent decline in the lower Tier II rate for lunch and supper. Alaska and Hawaii see a decline by one cent in the rates for meals and snacks in several situations.
Reimbursement rates have always been tied to the Consumer Price Index that tracks the cost of food nationally. This year rates for child care centers have gone up, while rates for homes have stayed the same (except for the Tier II rate for lunches and suppers). This is because the Consumer Price Index for centers is based on an average cost of “food away from home” while rates for homes are based on an average cost of “food at home.”
It is disappointing that the rates have not gone up for homes. Despite this very small decline for lunches and suppers for Tier II providers, providers are still 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 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.
2017-2018 CACFP Reimbursement Rates
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 $1.48
Snack $.73 Snack $.20
Tier I Alaska Tier II Alaska
Breakfast $2.09 Breakfast $.74
Lunch/supper $3.99 Lunch/supper $2.40
Snack $1.19 Snack $.32
Tier I Hawaii Tier I Hawaii
Breakfast $1.52 Breakfast $.55
Lunch/supper $2.88 Lunch/supper $1.74
Snack $.85 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 2018 taxes.
For tax year 2017 use the Tier I rates in effect at the beginning of 2017: $1.31 breakfast; $2.46 lunch/supper, and $.73 snack. Alaska: $2.09 breakfast; $3.99 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.”
Tom Copeland – www.tomcopelandblog.com