Per Diem Deduction for Day Care Meals for 2016

Day care providers can deduct the meals they provided to the people being cared for.  These meals can be based on actual costs or a per diem amount.  The per diem amounts for accounting for meal expenses for day care providers are based on the CACFP reimbursement rate.  The rates for 2016 tax deduction purposes are based on the CACFP rates effective July 1, 2015.  Here is a reminder of some of the details along with the 2016 rates.

General – If the provider is receiving a reimbursement under the CACFP (Child and Adult Care Food Program of the Dept of Agriculture) or any other program, the amount allowed as a deduction is the per diem rate less the reimbursement.  A family day care provider can use these rates for up to one breakfast, one lunch, one dinner, and three snacks per eligible child per day.

Rates – The rates are equal to the Tier 1 reimbursement rates of the CACFP for meals served in day care homes.  They will be adjusted each year and can be found at www.usda.gov under “Child and Adult Food Care Program” and clicking on Reimbursement Rates.    

Included – These rates include beverages, but not non-food supplies such as containers, paper products, or utensils.

Consistency – The provider can choose to use either the actual expenses or the per diem method, but must use the chosen method for the entire tax year.  Each year is a separate choice.

Record Keeping – The provider must keep records to substantiate their computation of the meals provided.  These records should show the name of the applicable child, the dates and hours of attendance in the provider’s day care, and the type and quantity of meals and snacks served.  Revenue Procedure 2003-22 has a sample log which can be used for this purpose.

The amounts allowed for 2016 are:

- Other than Alaska or Hawaii
- - Breakfast - $1.32
- - Lunch/Dinner - $2.48 each
- - Snack - $0.74 each


This text has been shared with you courtesy of:  David & Mary Mellem, EAs & Ashwaubenon Tax Professionals, 920-496-1065 (920-496-9111).