How Child-Care Providers Can Get Government Help

In tough economic circumstances, some American families have been forced to re-evaluate which is friendlier to the checking account: staying at home with the kids or paying for child care to bring in an extra income.  This is making the competitive market of child care all the more fierce.  If you are a child care provider, how can you leverage the government to stay competitive when some of your customers are considering the option to stay home over rather than employ your services?


Keep Pricing Competitive

As a day care provider you may be eligible for additional tax credit for your business that will allow you to keep prices at a competitive level.  Many day care and/or child care businesses are run out of the owner’s home.  If you use space in your home on a regular basis for providing daycare, you may be able to deduct the business expenses for that part of your home even if you use the same space for non-business purposes. To qualify for this exception to the exclusive use rule, you must meet both of the following requirements.

?        You must be in the trade or business of providing daycare for children, persons age 65 or older, or persons who are physically or mentally unable to care for themselves.

?        You must have applied for, been granted, or be exempt from having, a license, certification, registration, or approval as a daycare center or as a family or group daycare home under state law. You do not meet this requirement if your application was rejected or your license or other authorization was revoked.

Additionally, if you provide meals or snacks as a part of your day care services, the IRS may have another type of tax credit available for you.  Find out more from the IRS.


Don’t Give Your Customers another Reason to Stay Home

The last thing that a parent needs when weighing their child care options is any additional reason why taking their child out of day care would be beneficial.  Make sure that you are compliant with all of the current safety regulations.  Use this Child Care Safety Checklist as a quick reference to see if you are on par.  The checklist (developed by the U.S. Consumer Product Safety Commission) is also available in Spanish.


Child care providers should also ensure that they are compliant with the Americans with Disabilities Act put forth by the Department of Justice.  Child care centers, like other public accommodations such as private schools, recreation centers, restaurants, hotels, movie theaters, and banks — must comply with title III of the ADA.  


Child care services provided by government agencies, such as Head Start, summer programs, and extended school day programs, must comply with title II of the ADA.  Both titles apply to a child care center’s interactions with the children, parents, guardians, and potential customers that it serves.


Thinking About Starting a Child Care Business?

Visit to get a full list of licenses and permits you need on a state, local, and federal level.  Additional resources on starting a quality child care business are available from the U.S. Small Business Administration.