Food Program Question

[My4SunshineGirlsNY]

I have not yet participated in the food program...when you get a payment check for the food program, is that counted as income?

I'm asking because I got conflicting info...when I took a start up business class I remember the instructor stating we need to count that as income....a couple of months ago my registrar had someone call me on it and she left a message stating it ISN'T counted as income.

So I thought I would ask those that have been on it. Thanks ladies!

[DanceMom]

I have counted it as income for the three years I have been on it. My accountant has a line for it to be added when I do my final sheet so I assume since the line is there that it is.

[kpa0627]

Yes you must count it as income. But, you are able to deduct what you actually spent in groceries. More than likely you will spend more than you make so it shouldn't hurt you in any way.

[TomCopeland]

Food Program as income

Money you receive from the Food Program definitely is income. The latest version of the IRS Audit Guide on family child care clearly states this. However, the reimbursements you receive for your own children (if you do receive such reimbursements because your family is low income eligible) are not income. Food eaten by your own children is never deductible as a business expense.

Whether you are on the Food Program or not - money you spend on food for the children in your care is tax deductible. You can use the standard meal allowance rate to claim your food expenses (no receipts necessary!) or you can save food receipts and estimate your actual food cost.

[DancingQueen]

I was told by my area coordinator (for the food program) that the money I claim on my taxes for groceries spent should be LESS the amount I recived from the food program.
So if in january I spent 800 in groceries and I got a check for 100.00 then I can only claim that I spent 700 in groceries on my taxes.
That would make me believe that I wouldn't be claiming it as income. But what Tom is saying makes a lot more sense than what my area coordinator is saying.
Now I'm confused.

[legomom922]

I think the 700 would be deductable but the 100 as income?? Im sure if you post another question and direct to Tom, he can let you know. Or you can to to his ne wblog and ask too, and then come back and let us know!

[marniewon]

I was told by my area coordinator (for the food program) that the money I claim on my taxes for groceries spent should be LESS the amount I recived from the food program.
So if in january I spent 800 in groceries and I got a check for 100.00 then I can only claim that I spent 700 in groceries on my taxes.
That would make me believe that I wouldn't be claiming it as income. But what Tom is saying makes a lot more sense than what my area coordinator is saying.
Now I'm confused.

I don't agree with that at all - I don't think your area coordinator knows what they are talking about - unless you get a heck of a lot more back from the food program than I do!!! I only get 18 cents for each child per snack, something like 38 cents for breakfast and 50 cents per lunch!! And I can only claim 3 meals per day, not all that I serve. I spend WAYYYY more than that on food for my daycare kids!

[DancingQueen]

I don't agree with that at all - I don't think your area coordinator knows what they are talking about - unless you get a heck of a lot more back from the food program than I do!!! I only get 18 cents for each child per snack, something like 38 cents for breakfast and 50 cents per lunch!! And I can only claim 3 meals per day, not all that I serve. I spend WAYYYY more than that on food for my daycare kids!

that is exactly why I'm no longer providing meals. I am already getting excited about the money we'll be saving.

[TomCopeland]

Food Program as income

If you got $100 from the Food Program one month and spent $800 on groceries that month you should report $100 as income and $800 as an expense (assuming you were using the actual expenses method of claiming food expenses and the $800 was for food for your business children).

If you are on the lower Tier II you would certainly be spending less on food than you get from the Food Program. Most providers use the standard meal allowance method to claim food expenses.