How to Start a Home Daycare – Part I

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Providing child care in your home can be a part-time or full-time business.  You can be licensed or unlicensed.  You may have a degree in early childhood education or have experience as a mother or babysitter.  How do you get started?  Here are some answers to your questions:

Do I have to get a license to care for children in my home?

-This varies significantly from state to state.  Most states allow you to care for a certain number of children in your home (that are not your own) before requiring you to obtain a license.  To find information specific to your state, initiate a search for child care licensing.  In my state of Rhode Island, DCYF (RI Department of Children and Families) is the place to start.  You can visit your state’s website or call to speak to someone.  Terminology varies, but in RI, we are called Family Child Care Homes.  Regulations for daycare centers in commercial locations are much stricter than those for Child Care Homes.  Licensing for child care homes take into consideration that your home serves a dual purpose of providing shelter for your own family as well.

-Usually, there will be some type of informational meeting or orientation you can sign up to attend.  This will give you the basic information you need to decide if starting a family child care home is for you.  Some states will offer required training.  In RI, we took a 13-week course covering everything from literacy in early childhood programs to how to report suspected child abuse.  If you have a background in early childhood education, much of this information will be familiar, however, you’ll benefit from the contacts and unexpected friendships that you’ll make.  If you are new to providing child care, these classes will be a very beneficial introduction to the field of early education.

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If I don’t have a license, can I still claim my earnings and take advantage of business tax deductions?

Surprisingly, yes you can.  You would list your occupation as childcare provider on your tax forms.  You can claim money received and legally deduct supplies and equipment purchased to provide care.  You may also claim a partial amount of regular home expenses related to having a business in your home:  mortgage or rent, utilities, and some home repairs for example.  For more information on taxes and other financial topics related to child care businesses , visit this expert’s blog:  Tom Copeland’s Taking Care of Business.

What are the advantages of being licensed to care for children in my home?

Other than increasing the number of children you can legally care for in your home, being a licensed child care home allows you to receive state funds for eligible children. You would be listed as a licensed provider with your state’s licensing department, and parents (including foster parents) who receive subsidies to help them pay for daycare costs would be able to enroll their children in your program and have the state pay you directly.  This could increase the pool of families who would use your services.

As a licensed childcare provider, you would also be eligible for the USDA’s Food Program, which will reimburse you for nutritious food served to the children in your program. There are also pros and cons to this program and not all providers choose to join.  There are strict guidelines and meal limits, which might not fit in with your personal philosophies.  To learn more about this program, go to:  USDA Food Program

Licensed providers may have access to more resources than unlicensed providers. Some of the resources include:  being eligible to apply for state grants, which can provide funds for educational materials and equipment; being able to participate in the state’s rating system for child care homes (an example in RI:  Bright Stars); and being able to join a professional organization of other licensed providers in your state to receive training and support (an example here in RI:  Family Child Care Homes of RI).

Once you find out the basic requirements and regulations in your state pertaining to owning and operating a home child care business, you will be ready to start planning for your business.

If you have specific questions related to this first phase of deciding to become a home childcare provider, please ask and I’ll do my best to provide an answer for you!