The Food Program is Still a Great Deal!

The recent announcement that the Food Program reimbursement rates did not go up for the coming year is discouraging to many family child care providers.

In my discussions with providers across the country I know that many are under a lot of stress due to: inconsistent enforcement of licensing regulations, low pay when caring for subsidized children, pressure to increase the quality of your program without adequate financial rewards and the new Food Program meal pattern requirements that take effect this fall.

And now you won’t get a raise in the Food Program reimbursement, despite that fact that food costs have gone up for many providers!

Congress makes the rules that set the reimbursement rates , so you should contact your Congressional representative and Food Program sponsor to lobby to raise these rates.

Don’t Give Up on the Food Program!

Despite the fact that the Food Program rates went down in 2016 and stayed flat in 2017 is not a reason to leave the Food Program!

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 and 2018.
  • 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 those you are not reimbursed by the Food Program). 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 and 2018.
  • 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 and 2018.
  • Meals and snacks that you are reimbursed for by the Food Program can still be deducted as a business expense. So, you don’t lose any food deductions when joining the Food Program.
  • 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. 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.

I’ve developed a series of handouts that helps explain the financial benefits of being on the Food Program:

Common Objections to the Food Program

Is It Worthwhile to Claim a 20-Cent Snack?

The Tax Consequences of Child and Adult Care Food Program Participation

Why Should I Stay on the Food Program?

I’ve also written a series of handouts for Food Program sponsors to help them communicate with providers about the financial benefit of the Food Program. Everyone is free to use any of these handouts.

Tom Copeland – www.tomcopelandblog.com

Image credit: https://www.cacfp.org/news-events-conferences/nutrition-news-feed/

record-keeping-smallFor more information about how to report Food Program income and claim food expenses see my book Family Child Care Record Keeping Guide.



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

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