The amount that family child care providers can deduct as food expenses using the standard meal allowance rate will be slightly less in 2017 than it was in 2016.
But, don’t let this lower rate for next year affect your decision to stay on the Food Program or join the Food Program.
The standard meal allowance rate for 2016 is: Breakfast $1.32, Lunch/Supper $2.48, Snack $.74.
The standard meal allowance rate for 2017 is: Breakfast $1.31, Lunch/Supper $2.46, Snack $.73.
This represents a loss of 4 cents a day if you serve a breakfast, lunch and snack, or $10.40 per child per year.
The lower rate for 2017 is only one cent below the rate for 2015, so it doesn’t represent a substantial change.
Things to keep in mind
- You are still always better off financially if you join the Food Program. For every $1,000 you get from the Food Program you will have about $600-$700 in your pocket after paying taxes on this income.
- All providers can use this standard meal allowance rate to deduct their food expenses, whether they receive the higher (Tier I) or lower (Tier II) reimbursement from the Food Program.
- You can deduct up to one breakfast, one lunch, one supper and three snacks per day per child (if you serve that many) using this rate.
- If you serve a breakfast, lunch and snack each day you can deduct $1,170 in food expenses for each child for 2017. For 2016 the amount is $1,180.
- You don’t have to save any food receipts when using the standard meal allowance method.
- You can deduct meals and snacks even if they are not nutritious. For example, let’s say you get reimbursed for serving a breakfast, morning snack and lunch. If you serve an afternoon snack of a popsicle, cracker or candy bar, you can still count this as a snack and deduct $.73 in 2017.
- Therefore, keep daily records of all un-reimbursed meals and snacks. One snack a day for one child for a year is worth a $189.80 deduction in 2017 vs. $192.40.
- Meals and snacks that you are reimbursed for by the Food Program can still be deducted as a business expense.
- If you receive reimbursements for your own children you don’t have to report this as income. Food served to your own children is never deductible.
The Food Program is still a good deal!
The Food Program is a federally funded program that reimburses family child care providers for serving nutritious food.
All regulated providers are eligible to participate.
Reimbursements you receive from the Food Program are taxable income (with the exception of those you receive for your own children). But, you can deduct these same meals using the standard meal allowance rule. For most providers their food deduction is larger than the income from the Food Program.
It’s worth your time to join the Food Program! Most providers spend less than 3 hours per week on Food Program paperwork. If you care for four children you will be earning about $14 or $30 per hour for your time! That’s more than you earn per hour caring for children!
To join the Food Program sign up with a local non-profit Food Program sponsor. To find local sponsors contact your local Child Care Resource and Referral agency or you state agency that administers this program.
Tom Copeland – www.tomcopelandblog.com
Image credit: https://www.cacfp.org/news-events-conferences/nutrition-news-feed/
For more information about how to report Food Program income and claim food expenses see my book Family Child Care Record Keeping Guide.