Home Daycare License Requirements: How to Open a Licensed Family Child Care

A licensed home daycare can be a meaningful and reliable business: families need trustworthy care, and many areas face a shortage of spaces, especially for infants. Because you are caring for young children, licensing is detailed and inspections are taken seriously. This guide walks through the typical requirements and steps so you can plan with confidence.

Step 1: Know the types of child care licences

States commonly use these categories, though names differ:

• Family child care home (small): care in the provider's home for a limited number of children, often around six to eight including limits on infants.
• Group or large family child care home: care in the provider's home for more children, typically requiring an assistant.
• Child care centre: care in a non-residential building with more staff, more children and stricter building requirements.
• License-exempt care: some states exempt very small arrangements or relative care, but exempt providers may still need registration to receive subsidies.

Start by finding your state's child care licensing agency (often part of a human services, health, or early education department). Child Care Aware of America also links to state resources.

Step 2: Check eligibility and attend orientation

Many states require prospective providers to attend an orientation session before applying. It explains rules, the application, inspections and timelines. Ask:

• How many children, and how many infants, can I care for under each licence type?
• What training is required before licensing?
• How long does the process take?
• What are the fees?

Step 3: Complete background checks

Federal rules tied to the Child Care and Development Block Grant require comprehensive background checks for child care providers who receive subsidy funds, and states generally require them for all licensed providers. Typical checks include:

• Fingerprint-based FBI and state criminal history checks
• State sex offender registry checks
• Child abuse and neglect registry checks

In a home daycare, checks often extend to every adult living in the home, and sometimes to regular visitors and teenagers above a certain age.

Step 4: Complete required training

Common requirements include:

• Pediatric first aid and CPR certification
• Health and safety training on topics such as safe sleep, preventing shaken baby syndrome, medication administration, allergies, emergency preparedness and building safety
• Child development or early learning coursework in some states
• Ongoing annual training hours to renew

Step 5: Prepare your home

Inspectors check the home for safety. Typical requirements include:

• Working smoke and carbon monoxide detectors, fire extinguishers and an emergency evacuation plan
• Covered outlets, secured cords and window blind cords
• Locked storage for cleaning products, medications and any firearms (some states have specific firearm rules)
• Safe sleep areas: cribs meeting federal safety standards for infants, with infants placed on their backs
• Gates for stairs, safe outdoor play areas with fencing
• Clean food preparation and diapering areas with handwashing
• Adequate indoor space per child and appropriate toys and materials
• Pool, hot tub and water hazards secured according to state rules

Check zoning and any homeowners association or lease rules; some restrict home businesses or require notification.

Step 6: Apply and pass inspection

Submit the application with fees, background check results, training certificates and required documents. A licensing worker usually visits for an inspection, and fire or health inspections may also be required. Once licensed, expect periodic and sometimes unannounced inspections.

Step 7: Get insurance

Homeowners insurance usually excludes home business activity involving children. Obtain:

• Child care liability insurance
• An endorsement or separate policy for property used in the business
• Accident insurance for enrolled children in some cases
• Commercial auto if you transport children (and check state rules on transportation)

Step 8: Set up your business

• Register the business and get an EIN on IRS.gov.
• Write a parent handbook: hours, holidays, tuition, late fees, illness policy, meals, discipline approach, emergency procedures.
• Use an enrolment contract for every family.
• Keep required records: attendance, immunisations, emergency contacts, medication logs, incident reports.

Food programme and subsidies

The USDA Child and Adult Care Food Program (CACFP) reimburses eligible licensed providers for serving nutritious meals and snacks that meet programme guidelines, usually through a sponsoring organisation. Many states also have child care subsidy programmes that pay providers for eligible families. Both can make your business more stable.

Pricing tuition

Research local rates by age group, since infant care costs more because of lower ratios. Consider:

• Weekly tuition charged in advance, regardless of absences, to keep income stable.
• Registration fee and annual supply fee.
• Late pickup fees.
• Paid holidays and provider vacation stated in your contract.

Many states publish a market rate survey used for subsidy rates, which is a helpful benchmark.

Taxes for home providers

Home daycare providers may deduct a business-use percentage of home expenses based on time and space used for the business, along with food, supplies and other expenses, subject to IRS rules. Keep detailed records and consider a tax professional familiar with family child care.

A licensing checklist

• ☐ Attend state orientation
• ☐ Choose licence type and capacity
• ☐ Complete background checks for all required household members
• ☐ Complete first aid, CPR and health and safety training
• ☐ Prepare the home and correct safety issues
• ☐ Submit application and fees
• ☐ Pass licensing, fire and health inspections
• ☐ Buy child care liability insurance
• ☐ Write handbook and contracts
• ☐ Enrol in CACFP and subsidy programmes if eligible

A sample daily schedule

Licensing workers and parents both want to see a structured, age-appropriate day. A family child care home for mixed ages might follow:

Infants follow individual feeding and sleep schedules, always placed on their backs to sleep in a safe crib.

Your parent handbook: key sections

• Hours, holidays and provider vacation days
• Tuition, due dates, late payment fees and late pickup fees
• Enrolment requirements: forms, immunisation records, emergency contacts
• Illness policy: when children must stay home and when they can return
• Meals and snacks, including allergy procedures
• Guidance and discipline approach
• Emergency and evacuation procedures
• Authorised pickup and release policy
• Communication: daily reports, photos and how to raise concerns
• Termination of care and notice periods

A clear handbook prevents most disputes before they start and shows inspectors you run a professional programme.

Questions readers ask

Can I care for my own children while running a daycare?

Usually yes, but many states count your own young children toward the licensed capacity. Check how your state counts them when planning enrolment.

How long does licensing take?

Many states take a few weeks to several months from orientation to licence, depending on background check processing, training completion and inspection scheduling. Start early and keep copies of every document you submit.

Your next step

Find your state child care licensing agency, register for the next orientation, and request the family child care rules. Read the ratio and space requirements first; they determine how many children you can serve.

The full guide, Starting a Home or Center Daycare, covers licensing steps, home setup, curriculum and daily schedules, handbook and contract templates, tuition pricing, subsidies and CACFP, and a 30/60/90-day launch plan for $0.99.