Business Resources for Family Child Care Providers

2008 Tax Changes for Family Child Care Provider

January 2009




Standard Mileage Rate



The standard mileage rate for 2008 is 50.5 cents per business mile for January 1 through - June 30. The rate for the second half of the year is 58.5 cents.



The rate for 2009 is 55 cents per mile.



Standard Meal Allowance Rate



The standard meal allowance rate for 2008 is $1.11 breakfast, $2.06 lunch/supper, and $.61 snack.



Special Bonus Depreciation Allowance


  • Providers can claim a 50 percent special depreciation allowance for property acquired and placed in service during 2008.




  • Eligible property must have a recovery period of 20 years or less.
    This includes: office equipment (computers, copies, printers, etc.), furniture, appliances, fences, play equipment, etc.
    It does not include home improvements or the home.




  • The original use of the property must begin with the provider in 2008 ("new" property).



  • Example - Family child care provider buys $2,000 of playground equipment


    • If it was used more than 50% in the business, provider can use
      Section 179
    • If it was used 40% for business:

      • $2,000 x 40% = $800 business basis
      • $800 x 50% = $400 - bonus depreciation on Form 4562
      • $800 x 50% = $400 - 7 year MACRS depreciation (14.29%) = $57.16 on Form 4562





Federal Minimum Wage


As of July 2008 the federal minimum wage rose to $6.55 per hour. In July
2009 it will increase to $7.25 per hour. Providers who hire only one employee, or only hire family members, do not have to pay the federal minimum wage. Providers, however, may have to pay their state minimum wage.





The income limit to qualify for the IRA Saver's Credit has risen to $53,000 adjusted gross income for couples filing jointly; $39,750 for heads of household; $26,500 for individuals or married couples filing separately.





For more information, see the 2008 Family Child Care Tax Workbook and Organizer (or 1-800-423-8309).