CACFP Reimbursement Rates
- Reimbursements vary according to the number of children claimed each day, the number of meals and snacks served that meet the program requirements, and the child care provider’s tier level of payment.
- The tier level is determined by the percentage of free and reduced cost lunches served at the providers local elementary school, the financial information of the provider (optional), and/or the financial information of the families for whom care is provided.
The following are meal and snack reimbursement rates as determined by the United States Department of Agriculture (U.S.D.A.) as of 07/01/19:
| Breakfast | Lunch/Supper | Snack | |
|---|---|---|---|
| Tier I | $1.65 | $3.12 | $.93 |
| Tier II | $0.59 | $1.88 | $0.25 |
The Tax Consequences of Child and Adult Care Food Program
Tier II Rate
Family Childcare providers will always benefit financially by being on the Food Program. Here are the tax consequences of a provider who joins the Food Program based on a provider caring for four children. The rates below are for July, 1 2023 – June 30. 2024.
Note: A provider on the Food Program is always entitled to claim food expenses in the same way as if he/she wasn’t on the Food Program. This means providers can deduct (as a food expense) meals that are reimbursed by the food program. As the example shows, providers who receive reimbursements from the Food Program are still better off than if they receive no reimbursement.
| Food Program Payment | Not on a Food Program | |
|---|---|---|
| Parent Fees (4 Children @ $200 a week*) | $38,400 | $38,400 |
| Food Program Income | $2.829 | $0 |
| Total Income | $41,229 | $38,400 |
| Business Expenses | -$11,000 | $-11,000 |
| Food Expenses | -$6000 | $-6,000 |
| profit | $24. 229 | $21,400 |
| Federal Taxes (34%) | $8239 | $7276 |
| Cash on Hand at the End of the Year | $15,991 | $14,124 |
The Provider on the Food Program has $1,867 ($15,991-$14,124) more in their pocket after taxes than the provider not on the Food Program. It’s true that a provider’s taxes may go up after joining the Food Program, but her profit and after-tax income will go up.
For the table above, we used the 2023-2024 rates. and assumed the provider served a breakfast lunch and snack. We also based the federal income tax at 32% due to 22% Federal income tax and 12% Social Security tax.
*Plug in what you charge here!