2020-2021 Food Program Reimbursement Rates Announced

The 2020-2021 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, 2020 to June 30, 2021.

These new rates represent the most significant increase in many, many years. The higher Tier I rate has increased by 4.8%.

A reminder that all providers are 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.

2020-2021 CACFP Reimbursement Rates

Tier I – All states except AK and HI    Tier II – All states except AK and HI

Breakfast $1.39                                                   Breakfast $.50

Lunch/supper $2.61                                           Lunch/supper $1.58

Snack $.78                                                           Snack $.21

Tier I Alaska                                                     Tier II Alaska

Breakfast $2.22                                                  Breakfast $.78

Lunch/supper $4.24                                          Lunch/supper $2.55

Snack $1.26                                                         Snack $.35

Tier I Hawaii                                                     Tier I Hawaii

Breakfast $1.62                                                  Breakfast $.58

Lunch/supper $3.06                                          Lunch/supper $1.84

Snack $.91                                                           Snack $.25

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 for 2020. When you claim food expenses you can use the Standard Meal Allowance Rate or an actual food cost method.

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 2021 taxes.

For tax year 2020 use the Tier I rates in effect at the beginning of 2020: $1.33 breakfast; $2.49 lunch/supper, and $.74 snack. Alaska: $2.12 breakfast; $4.04 lunch/supper, and $1.20 snack. Hawaii: $1.54 breakfast; $2.92, lunch/supper, and $.87 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. Meals or snacks that are not reimbursed by the Food Program do not need to be nutritious. A popsicle is a snack. 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.”

Here is the announcement of these new rates.

Tom Copeland – www.tomcopelandblog.com

Image credit: https://www.cdc.gov/nccdphp/dnpao/division-information/media-tools/dpk/vs-fruits-vegetables/index.html

For more information about the Food Program and claiming food expenses, see my book Family Child Care Record Keeping Guide.