SECTION 4. DEFINITIONS

.01 Family Day Care Provider. A family day care provider is a taxpayer engaged in the trade or business of providing family day care.

.02 Family Day Care. Family day care is child care provided to eligible children

2003–10 I.R.B. 577 March 10, 2003

family day care in any particular taxable year. Family day care providers who choose to use the standard meal and snack rates provided in this revenue procedure for a particular taxable year must use the rates for all their deductible food costs during that taxable year. However, a family day care provider who uses the standard meal and snack rates in any taxable year may use actual costs to compute the deductible cost of food in any other taxable year.

.03 Record Keeping. To satisfy the record keeping requirements of § 6001 and the regulations thereunder, family day care providers who use the standard meal and snack rates provided in this revenue procedure must maintain records to substantiate their computation of the total amount deduct

ible under this revenue procedure for each taxable year. The records should include the name of each eligible child, dates and hours of attendance in the family day care, and the type and quantity of meals and snacks served. This information may be recorded in the meal and snack log contained in the APPENDIX to this revenue procedure. A family day care provider who uses the log in the APPENDIX to maintain accurate and required information will be deemed to comply with the record keeping requirements of § 6001 and the regulations thereunder.

.04 Standard Meal and Snack Rates. The standard meal and snack rates are equal to the Tier I reimbursement rates of the CACFP for meals served in day care

(1) For all family day care providers other than those located in Alaska or Hawaii:

Breakfast $0.98 Lunch/Dinner $1.80 Snack $0.53

(2) For family day care providers located in Alaska:

Breakfast $1.55 Lunch/Dinner $2.93 Snack $0.87

(3) For family day care providers located in Hawaii:

Breakfast $1.13 Lunch/Dinner $2.11 Snack $0.63

.05 What is Included in the Standard Meal and Snack Rates. The standard meal rates apply to breakfast, lunch, and dinner. The standard meal and snack rates include beverages, but do not include nonfood supplies used for food preparation, service, or storage, such as containers, paper products or utensils. The standard meal and snack rates do not include other nonfood items such as medication, administrative supplies, or toys. A family day care provider who uses the standard meal and snack rates may separately deduct the cost of these non-food items if the cost is deductible under § 162.

.06 Annual Adjustment of the Standard Meal and Snack Rates. The standard meal and snack rates will be adjusted annually. The Department of Agriculture adjusts the Tier I reimbursement rates each July based on changes to the consumer price index for the cost of food at home. Although the Tier

I reimbursement rates apply for the period of July 1 to June 30 of each year, for purposes of this revenue procedure the standard meal and snack rates applicable for a particular taxable year are the Tier I rates in effect on December 31 preceding the beginning of the family day care provider’s taxable year.

Generally, the CACFP reimbursement rates may be found on the Internet at www.usda.gov under “Child and Adult Care Food Program.” The Service will post the standard meal and snack rates currently in effect under this revenue procedure on the Internet at www.irs.gov/businesses/small/ industries/index.html, then click on “Child Care.” The Service will also include the standard meal and snack rates that are current at the time of publication in Publication 587, Business Use of Your Home.

homes. For purposes of this revenue procedure, the standard meal and snack rates for a taxable year are the Tier I rates in effect on December 31 preceding the beginning of the family day care provider’s taxable year. For example, for the 2003 taxable year, calendar year family day care providers will use the Tier I rates in effect on December 31, 2002, as the standard meal and snack rates to calculate their deductible food costs for the entire 2003 taxable year. The rates will be adjusted annually (see section 5.06 of this revenue procedure).

The standard meal and snack rates in effect on December 31, 2002, are: