The time-space percentage
Publication 587 has providers multiply two shares. The space share is the square feet used regularly for daycare over the home's total. The time share is the hours the space is used for daycare (including set-up and cleaning) over the hours in the year: 8,760, or 8,784 in a leap year.
Its example: 1,600 of 3,200 square feet is 50%; 12 hours a day, 5 days a week, 50 weeks is 3,000 hours, or 34.25% of 8,760; 50% × 34.25% is 17.12%. That share of rent or mortgage interest, utilities and insurance goes to Schedule C line 30 through Form 8829 or the simplified method.
The standard meal and snack rates
Instead of keeping every food receipt, a provider can count each meal and snack served to eligible children (not their own children, and not anyone who lives in the home) at the standard rates in Publication 587's Table 3: at most one breakfast, one lunch, one dinner and three snacks a child a day.
- 2025, the 48 states and DC: breakfast $1.66, lunch and dinner $3.15, snack $0.93.
- 2025, Alaska: breakfast $2.66, lunch and dinner $5.10, snack $1.52.
- 2025, Hawaii, Guam, Puerto Rico and the Virgin Islands: breakfast $2.14, lunch and dinner $4.09, snack $1.22.
Keep a record of each child, the dates and hours in care, and the meals and snacks served. Food the food program paid you for counts only above what it paid.
What parents need from you
For their dependent care credit, parents need your name, address, taxpayer ID and the amount they paid (Form 2441's instructions); Form W-10 is the IRS's form for giving it. The tax kit prints a year-end statement with those lines.