Taxes for a Maine home day care provider
How is a Maine family child care provider taxed, and what home expenses are deductible?
Self-employment tax: 15.3 percent of net profit
A home day care's profit is self-employment income, and self-employment tax is 15.3 percent of net earnings. That is 12.4 percent for Social Security and 2.9 percent for Medicare.
It is calculated on Schedule SE with the Form 1040, and half of it comes back. You deduct the employer-equivalent portion when calculating your adjusted gross income, a deduction wage earners do not get.
This tax sits on top of income tax, not inside it — plan cash for both. For a provider whose fees arrive weekly and whose expenses arrive unevenly, quarterly estimated payments are the mechanism that keeps the spring from becoming a crisis.
15.3%The self-employment tax rate is 15.3 percent — 12.4 percent for Social Security and 2.9 percent for Medicare — and the employer-equivalent portion is deductible against gross income. — IRS, retrieved 2026-09-29
The daycare exception to the exclusive-use rule
The ordinary home-office rule demands a space used exclusively for business. Family child care is the exception. If you use space in your home on a regular basis for providing daycare, you may be able to claim deductions for that part of the home even though the same space is used for nonbusiness purposes.
The exception has two requirements. You must be in the trade or business of providing day care for children or others unable to care for themselves. And you must have applied for, been granted, or be exempt from a license, certification, registration or approval as a daycare center or family or group daycare home under state law.
Read the second requirement the way the IRS writes it: a rejected application or a revoked license ends the exception. Your Maine license is not paperwork — it is a condition of the deduction, which is one more line in the renewal guide's favor.
IRS Publication 587 allows a deduction for regular-but-not-exclusive daycare use of the home, provided the provider is in the daycare business and licensed, or exempt from licensure. — IRS, Publication 587, retrieved 2026-09-29
Hours, not just square feet
Because the space is shared, the deduction is shared. If the use of part of your home as a daycare facility is regular but not exclusive, you figure the percentage of time that part of the home is used for daycare. That is the hours used for daycare divided by the total hours the space was available for all uses.
The IRS treats a room available throughout each business day and regularly used in the business as used for daycare throughout each business day. You do not need records of specific hours for such a room, though occasional personal use is fine.
A room used only occasionally for business does not qualify. In practice: the play room counts all day, the guest room that hosts a nap twice a week does not, and no deduction is allowed for the cost of a basic local telephone line.
IRS Publication 587 figures the deduction for shared space by the percentage of time used for daycare — hours used for daycare over total hours the space was available for all uses. — IRS, Publication 587, retrieved 2026-09-29
Meals at the standard rates
A family daycare provider can use standard meal and snack rates instead of actual food costs. For the states other than Alaska, Guam, Hawaii, Puerto Rico and the Virgin Islands, the 2025 rates are $1.66 for breakfast, $3.15 for lunch, $3.15 for dinner and $0.93 for a snack.
The ceiling is one breakfast, one lunch, one dinner and three snacks per eligible child per day. Eligible children are the ones in your paid care — not your own children or children living in the home.
Your own children in the program are excluded twice over: their meals are not reimbursable and not deductible at the standard rates. See the food program page for what the federal program pays for the enrolled children's meals.
| Meal | 2025 standard rate | Daily maximum per child |
|---|---|---|
| Breakfast | $1.66 | 1 |
| Lunch | $3.15 | 1 |
| Dinner | $3.15 | 1 |
| Snack | $0.93 | 3 |
$1.66 / $3.15 / $0.93IRS Publication 587 sets the 2025 standard meal and snack rates at $1.66 for breakfast, $3.15 for lunch, $3.15 for dinner and $0.93 for a snack, for most states. — IRS, Publication 587, retrieved 2026-09-29
IRS Publication 587 allows the standard meal and snack rates for a maximum of one breakfast, one lunch, one dinner and three snacks per eligible child per day. — IRS, Publication 587, retrieved 2026-09-29
Reimbursed meals deduct differently
If you receive reimbursement for a meal — from the Child and Adult Care Food Program or a state equivalent. You deduct only the portion of the applicable standard rate that is more than the reimbursement.
The reimbursement itself is income on the return, reported separately from the parent fees. The pair of rules is what makes the food program a net positive rather than a wash at tax time.
Keep the meal counts current daily, not reconstructed in April. The reimbursement claims and the deduction are both built on the same attendance records that a Maine provider must keep for the license anyway. The state's attendance record and the federal claim form agree, or neither is credible.
IRS Publication 587 states that if a provider receives reimbursement for a meal or snack, only the portion of the applicable standard rate that is more than the reimbursement may be deducted. — IRS, Publication 587, retrieved 2026-09-29
Bring the license and the records to your preparer
The documents that matter at tax time are the ones this site's other pages told you to keep anyway. They are the license that qualifies the home-use exception, the attendance records that back the meal counts, and the receipts for the market items in the cost breakdown.
The EIN, if you took one for the LLC, goes on the return with the entity choice it belongs to. Single-member LLC's income still lands on your 1040 by default, as the LLC page notes.
And set the calendar before you leave the preparer's office: June 1 for the LLC annual report, sixty days before expiry for the license renewal. The deductions survive a missed reminder; the license does not.
IRS Publication 587 states a rejected application or revoked license does not meet the daycare exception's licensing requirement. — IRS, Publication 587, retrieved 2026-09-29
Questions
Can I deduct my whole home because children use most of it?
No. Only the space used regularly for daycare counts, and shared space is deducted by the percentage of time it is used for daycare. Rooms used only occasionally for business do not qualify at all.
Does Maine tax day care income differently?
The program's net profit is taxed on your Maine individual income tax return like any other self-employment income. Maine's income tax is set by the individual income tax statute, and the license fees and training costs are ordinary business expenses on the way there. No Maine-specific day care exemption appears in the family child care chapter.
Are meals reimbursed by the food program also fully deductible?
No. You deduct only the portion of the standard rate above the reimbursement, and the reimbursement is reported as income. The standard rates and the reimbursement rates are different numbers set by different programs.
What records does the IRS expect for the time percentage?
A room available throughout each business day and regularly used for the business is treated as used all day without hour-by-hour records. For anything beyond that pattern, the records are the same attendance and schedule documentation the state's licensing rule already requires.