TKW Consulting

“Why should I join the CACFP?
CACFP from a Business Income Perspective

Consider the following example:
(Example uses rates as of July 2005)

Tier I Tier II
Breakfast $ 1.06 $ .39
Lunch/Supper $ 1.96 $ 1.18
Snacks $ .58 $ .16
Totals $ 3.60 $ 1.73

Tier I Example: Tier II Example:
6 children x $3.60 = $ 21.60 6 children x $1.73 = $ 10.38
5 days per week = $108.00 5 days per week = $ 51.90
4 weeks per month= $432.00 4 weeks per month = $207.60

Would you say no to $432.00 a month additional income? Even if you were Tier II, would you say not to $207.60 per month? According to Tom Copeland, Redleaf National Institute, the average amount of time per month for Food Program record keeping is 1-2 hours. Even at Tier II rates, you would earn almost $100.00 per hour for record keeping that you would be required to do anyway. Rule 2 standards require providers to keep records of menus and foods served to children to document that nutritional guidelines have been met.

Sometimes providers are concerned that the Child and Adult Care Food Program reimbursement raises their income and the tax liability or they are concerned about losing the cost of food served as a tax deduction. The Food Program does increase your taxable income, and the reimbursement also decreases the amount you can deduct as food expense on your taxes. However, providers only pay a percentage of income as taxes. This means that you lose only a part of this additional income to taxes. A person does not turn down his or her paycheck because a percentage of it goes to pay taxes. This is the same principle. You may lose a portion of this income as a tax liability, but providers keep the majority of it as additional income for their family.”

// posted by Tammy Wachter @ 8:45 AM