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01/17/2011

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Justin

Interesting. Do you add the food cost for daycare children under "Meals and entertainment (80%)" or under "other expense"? This is not clear.

Tom Copeland

Put your food expenses under Other Expense on Schedule C, not Meals and Entertainment.

C Dow

Reimbursements are for 2 meals and 1 snack if I am correct. This is a Federal Food program it should be non taxable period we have kids that eat three meals and upto three snacks who are at out daycare for over 9 hours. What about our time for all the double record keeping we have to do for CACFP. What about our time and electricity for cooking and preparing or going out to buy these foods..Give us a break good god..We literally work a 10 hour hands on day then clean and sanitize do bookeeping and the like for another 2-3 hours thats a 13 hour day to take care of kids!! It is utterly rediculous that we would have to further worry about the IRS or an auditor paid for by our county ss dept from us applying for help with Health Insurance to up end us in an audit with their expertise especially when they are 9-5ers who punch the clock on my dime. We have been doing this as a group family daycare for 8 years and these last few have been skinny years..Once again it is rediculous..Thank you for the information I am going to bring this info with me to my audit by seasoned accounts that the county has sought out for their services to HELP (NOT) me with trying to get low or free health insurance for my wife and I.

Tom Copeland

The Food Program will reimburse you for either two meals and a snack or two snacks and a meal. I agree with you that the food reimbursements received under this program should not be taxed to family child care providers. Unfortunately, that is not the law. Fortunately, most providers can show food expenses that exceed their Food Program income.

Victoria

Tom: Is this correct?: For the CACFP reimbursement we can claim only 2 meals and 1 snack OR 2 snacks and 1 meal. However, according to IRS rules, we can claim as business expenses all meals and snacks served even if they do not meet CACFP meal components requirements or exceed the meals reimbursement allowance. This aaplies whether we use either the standard (per meal/snack) deduction amount or actual food purchase expenses.

Tom Copeland

The Food Program will only reimburse up to three servings a day (two meals and a snack or two snacks and a meal). However, if a provider uses the standard meal allowance she can deduct up to six servings a day per child (one breakfast, one lunch, one supper and three snacks). In receiving reimbursements a provider must serve nutritious food, but in claiming food expenses, the meals and snacks do not have to be nutritious (whether the provider uses the standard rate or the actual cost of the food).

Debz

Thank you so much for this information. I had been reporting the total income from food program. I now know to subtract the money I receive for my own children.Now I have to decide if I want to go back and file amendments for the 200 bucks a year.

Jeanne

Thanks for this information. I don't know where to show the amount of money I was reimbursed for my own children so it doesn't show up as taxable income. Any advice?

tom

If you receive a Form 1099 from your Food Program sponsor, show the entire amount on line 6 of Schedule C. Then determine the amount of reimbursement you received for your own child and add this amount to your food expense for the day care children. This will wipe out the income.

Michelle

Our tax accountant added my usda to my income, is this incorrect then?

Tom

Michelle - No, your tax preparer is correct. USDA reimbursements are taxable income to you.

Jessica

I started the food program in October 2013, but did not receive the first reimbursement check until December 2013. November and December's reimbursements will be received this year (2014). Do I still claim the cost of the food from November and December as an expense even though I will be at least partially reimbursed for them this year?

Tom

Yes, deduct your food costs for November and December. Claim the Food Program reimbursements for those months as income in 2014.

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