Day Care Providers Income and Expenses 2021

Daycare Income

As a daycare provider, you generally receive income from several sources. Examples include:

•  Direct payments from parents or guardians.
•  Direct payments from the employee benefit plan of a parent or guardian.
•  Subsidy payments from state and local agencies or from charitable organizations for specific children or adults in your care.
•  Sales of assets used in your daycare business.
•  Grants from state, local, or private agencies.
•  Reimbursements for expenses you incur, such as food program payments through the Child and Adult Care Food Program (CACFP).

Reporting Income

All the above items are included in your daycare gross income.

•  Grants made directly to your business are generally included in business income. If you spend the grant money in your daycare business, you can deduct those expenditures.
•  Most tax professionals recommend that you include reimbursements in your business gross income. You can then claim a deduction for the expenses included in the reimbursement.

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