Last updated 2026-07-09
TL;DR
In 2018, child care fee assistance (subsidy) eligibility and co-pay amounts were set by each state under federal CCDF rules that capped coverage at 85% of state median income. Families got sorted into income brackets, and co-pays rose with income up to a 7% ceiling. The federal floor was clear. Actual dollar thresholds varied by state, family size, and number of children in care.
What is child care fee assistance and who ran it in 2018?
Child care fee assistance is the government subsidy that pays part or all of a family's daycare bill when the family meets income and work-activity requirements. In 2018 the federal money behind it came from the Child Care and Development Fund (CCDF), run by the Office of Child Care inside the U.S. Department of Health and Human Services [1]. States, territories, and tribes each got a block grant. Then each one set its own income brackets, co-pay schedules, and provider rates inside the federal rules.
The 2018 rules traced back to the Child Care and Development Block Grant (CCDBG) Act of 2014, the first big reauthorization in 20 years. That law tightened eligibility definitions, added health and safety requirements, and forced states to publish their income thresholds and fee schedules where families could see them [2].
Every state had to submit a CCDF State Plan for the 2018-2019 period. Those plans spelled out how income categories were built, what counted as income, and how co-pays got calculated. If you served subsidy families in 2018, your numbers came from your state's plan. There was no single national chart to look at.
What was the federal income eligibility ceiling in 2018?
Federal law set the ceiling, not the floor. Under 45 CFR 98.20, states could not use CCDF funds to serve families above 85% of State Median Income (SMI) [1]. Most states set their limits well below that to make the money last. The Urban Institute found that in 2018 the median state entry eligibility limit was around 150% of the Federal Poverty Level (FPL), with a spread from roughly 100% FPL in some Southern states up to the full 85% SMI in a handful of others [3].
At 85% SMI, a family of three in 2018 landed somewhere around $49,000 to $55,000 a year, depending on which state's median income you plugged in. Most states used FPL-based thresholds for day-to-day eligibility decisions, not SMI-based ones.
States also set a separate continued-eligibility limit (sometimes called a retention limit), usually higher than the entry limit. The CCDBG Act of 2014 required states to keep families eligible for at least 12 months before a redetermination, on purpose, to cut churn [2]. That 12-month rule was a sharp break from pre-2014 practice, and it shaped how income categories got applied all through the 2018 plan period.
How did states structure income categories and co-pay brackets in 2018?
States used two main methods to turn income into a co-pay.
The first was a percentage-of-income sliding scale. The co-pay was a fixed percentage of gross monthly or annual income, and it climbed as income climbed. Some states used one flat percentage across all eligible incomes. Others tiered it (say, 5% of income up to 100% FPL, 8% from 100 to 150% FPL, and up from there).
The second was a fixed-bracket table. The state published a grid: income ranges down the rows, family size or number of children across the columns, and a set weekly or monthly dollar co-pay in each cell. A family got dropped into the cell that matched its gross income and household makeup.
Here's a simplified version of how a 2018 bracket table looked in a mid-range state for a family of three with one child in care. These numbers show the structure and match the shape of published state schedules from that period. They are not any single state's exact figures.
| Annual Gross Income | % of Federal Poverty Level | Monthly Co-Pay (1 child) |
|---|---|---|
| Up to $16,460 | Up to 67% FPL | $5 - $20 |
| $16,461 - $24,690 | 67% - 100% FPL | $21 - $75 |
| $24,691 - $36,420 | 100% - 148% FPL | $76 - $150 |
| $36,421 - $49,000 | 148% - 200% FPL | $151 - $275 |
| Above $49,000 | Above state limit | Not eligible |
Real co-pays swung hard by state, partly because the underlying cost of care did too. Child Care Aware of America's 2018 report found average annual center care for an infant ran from $5,178 in Mississippi to $23,089 in Washington, D.C. [4]. That spread is a big reason state co-pay schedules looked so different from each other.
Providers taking subsidy payments have to understand the bracket structure, because it splits the bill: what the state pays versus what the parent owes you directly. You collect the co-pay from the family. The state pays the rest, up to the market rate or reimbursement ceiling.
What counted as income for fee assistance eligibility in 2018?
"Total family income" under 2018 CCDF rules meant gross income before taxes, from basically all sources, for everyone in the family unit living in the household [1]. States had room to adjust the exact definition, but the federal rules leaned toward counting income broadly.
Usually counted: wages and salaries, net self-employment income, Social Security benefits, unemployment insurance, child support received, alimony, rental income, and regular cash contributions from household members.
Usually excluded: SNAP benefits, WIC benefits, certain disability payments, housing assistance, and in many states, income from a child under 18 who was a student. Some states also left out irregular or one-time money like a tax refund or an insurance settlement.
Self-employment caused the most confusion. Most states let self-employed parents subtract documented business expenses before counting income, but the paperwork rules were all over the map. A home daycare provider applying for a subsidy for her own second child would report net self-employment income, not gross revenue, under most state formulas.
Family size definitions mattered too. States generally counted the parent or parents plus all dependent children in the household. A two-parent home with three kids had a family size of five. Some states counted only children under 18. Others counted full-time students up to age 23. The childcare subsidy rules trip families up on this point constantly, and providers end up explaining it.
How did family size change eligibility thresholds in 2018?
Income limits went up with family size. A single parent with one child had a lower dollar ceiling than a two-parent family of five, because both FPL and SMI adjust for household size.
Here are the 2018 Federal Poverty Level figures, the anchors most states used for eligibility math [5]:
| Household Size | 2018 Annual FPL (48 contiguous states) |
|---|---|
| 1 | $12,140 |
| 2 | $16,460 |
| 3 | $20,780 |
| 4 | $25,100 |
| 5 | $29,420 |
| 6 | $33,740 |
| 7 | $38,060 |
| 8 | $42,380 |
Alaska and Hawaii had higher FPL figures. A state setting entry eligibility at 150% FPL would use $31,170 for a family of three and $37,650 for a family of four.
Co-pay brackets shifted with family size too. Bigger families generally paid lower co-pays at the same gross income, because that income was a smaller slice of their poverty threshold. It's a sensible design. It also means a provider can't look up a family's co-pay without knowing both the income and the household size.
Did the number of children in care affect the fee amount?
Yes, and plenty of providers miss this one. Most states in 2018 built co-pays so the amount went up when a second or third child from the same family was in care, but it didn't double or triple. The idea was that the subsidy should get more generous per child, because a family's income doesn't grow just because it has more kids in care.
Here's what that looked like in practice. A family might owe $120 a month for one child and $160 for two, not $240. Some states published separate co-pay columns for one, two, and three or more children. Others set the co-pay for the first child and tacked on a flat additional-child amount.
For providers, the takeaway is simple. When a family had two children at your program, you collected the one total family co-pay, not a per-child charge times two. The voucher or certificate spelled out the family's total co-pay and listed the state reimbursement separately for each child's slot.
How did work activity requirements connect to income categories in 2018?
Income was only half the test. CCDF rules also required a qualifying work activity, which in 2018 covered employment, job search, education, or job training [1]. States could set a minimum hour requirement (many used 20 hours a week) and could cap the authorized care hours to match the parent's schedule.
Income decided which bracket a family fell into. Work activity decided whether they qualified at all and how many hours of care they got. A parent working 25 hours a week might get part-day authorization even if their income put them in the lowest co-pay bracket.
Some states let families in job search or training get a time-limited subsidy with zero income at application. That produced the odd case of a family assigned to the lowest bracket ($0 income, lowest co-pay) on the assumption they'd be working within a few months.
For providers, work activity paperwork was a common cause of payment holds. If a parent's work status changed and the state found out, the authorization could get cut or ended mid-month. The 12-month redetermination rule from the 2014 CCDBG Act was meant to soften these mid-period jolts, but how well it worked depended on the state.
How did provider reimbursement rates connect to income categories?
The income category set the family co-pay. The provider reimbursement rate was a separate number, set by each state, usually as a market rate pulled from the state's market rate survey. The family co-pay plus the state reimbursement equaled the total payment you got for each subsidized slot.
One rule mattered above the rest: you could not charge subsidy families more than you charged private-pay families for the same care. That's the equal-access or non-discrimination requirement [2]. If you charged $1,200 a month for infant care to private-pay families, $1,200 was also the total payment ceiling for a subsidized infant, even when the state reimbursement rate came in lower.
In 2018 a lot of state reimbursement rates sat below the 75th percentile of market rates, the level HHS recommended. Child Care Aware of America reported that only about a third of states met or beat the 75th percentile benchmark for infant center care in 2018 [4]. The gap between what states paid and what care actually cost was, and still is, one of the hardest operational problems for providers taking subsidies.
If you're checking whether subsidized slots even pencil out for your program, the childcare tax credit side of the ledger may offset some of the administrative load, though it does nothing to close the rate gap itself.
What changed in 2018 compared to earlier CCDF rules?
The 2018 CCDF State Plans were the first full-cycle plans submitted under the 2016 final CCDF rule, which put the 2014 CCDBG Act reauthorization into effect [7]. Several changes were now fully live.
The 12-month continuous eligibility rule was the biggest. Before 2014, many states redetermined eligibility every three or six months, which knocked families off mid-year even when nothing much had changed. The 2014 law set a 12-month minimum before redetermination [2].
Streamlining enrollment and cutting the paperwork burden on families was another shift. It pushed some states toward presumptive eligibility, meaning payments started before every document was verified.
States also had to describe how they guaranteed equal access to good care, which nudged many to report on their market rate ceilings and, in some cases, raise them.
The CCDBG Act was blunt about co-pays. According to the Office of Child Care summary of the 2014 law, states could not set family co-payments above 7% of family income [8]. That 7% cap was a new federal guardrail. Before 2014, some states ran co-pays that ate a much bigger share of a low-income family's budget [2]. The 7% ceiling covered the family's total co-pay, not the amount per child.
For how subsidy programs bump into your licensing duties as a provider, ChildCareComp's compliance material walks through the documentation you need to accept CCDF payments in your state.
How do I find the actual 2018 income brackets for my state?
Go straight to your state's 2018-2019 CCDF State Plan, submitted to the Office of Child Care. The Administration for Children and Families (ACF) keeps archives of approved state plans [6]. Your state's licensing or subsidy agency website is a second route.
For a fast comparison, Child Care Aware of America published its annual "The US and the High Cost of Child Care" report in 2018, which pulled state eligibility limits and co-pay structures into one place [4]. It's downloadable from the Child Care Aware site and is one of the better secondary sources for state-to-state differences.
If you're helping a family sort out whether they qualified in 2018 for a past audit, appeal, or retroactive determination, you need that year's archived fee schedule, not the current one. Fee schedules change most years. Ask the state agency for the 2018 document by name.
For day-to-day subsidy work and your current obligations, get familiar with the childcare subsidy rules in your state, since income categories get recalibrated every plan year.
Were there special income rules for self-employed providers and parents in 2018?
Self-employment income got handled differently from W-2 wages in most states. Under typical 2018 state rules, self-employed parents submitted proof of business income and expenses, and the state used net self-employment income (after allowable expenses) in the eligibility math.
For home daycare operators running a business and applying for assistance for their own kids, this made for a paperwork puzzle. The parent had to show proof of self-employment income (usually a prior-year tax return plus recent profit-and-loss records) and proof of work activity (the business itself counted as employment). The state then figured net income and dropped the family into a bracket.
Here's the wrinkle: a daycare provider's income can bounce around, especially in the early years. Some states used an annualized calculation (last month's net income times 12). Others used a trailing 12-month average. The method changed the answer, because it could land a provider in a different bracket depending on whether they'd just had a slow quarter.
If your income was falling, the 12-month average worked against you by overstating where you were now. If it was rising, the average helped you. States rarely told you which method they used unless you asked the caseworker directly.
How did tribal CCDF programs handle income categories differently?
Federally recognized tribes that got direct CCDF grants (called Tribal CCDF Lead Agencies) had more room than states to set income categories and co-pay structures [9]. Tribes could define family income, family size, and eligibility thresholds around tribal membership, reservation residency, or other tribally set criteria, all inside the federal 85% SMI ceiling.
In practice, many smaller tribal programs used simple income brackets with very low or zero co-pays for members under a set income line. The machinery for complex sliding-scale co-pay tables just wasn't there the way it was at large state agencies.
If you ran a licensed child care program on tribal land in 2018 and took tribal CCDF funds, the income categories for your families lived in the Tribal CCDF Plan, not the state plan. Those plans are also in the ACF archives, though mainstream compliance guidance rarely talks about them [6].
Frequently asked questions
What was the maximum income to qualify for child care assistance in 2018?
The federal ceiling was 85% of State Median Income, but most states set lower limits. The median state entry limit in 2018 was around 150% of the Federal Poverty Level, roughly $31,170 for a family of three. Alaska and Hawaii used higher FPL figures. Your state's 2018-2019 CCDF State Plan has the exact dollar thresholds for each family size.
Did the 2018 CCDF rules cap how much states could charge families in co-pays?
Yes. The CCDBG Act of 2014, fully in effect by 2018, barred states from charging co-pays above 7% of a family's income. That applied to the total family co-pay, not per child. Before 2014, some states ran co-pays that ate a much larger share of low-income budgets. The 7% cap was a ceiling; states could charge less.
How did states verify income for fee assistance applications in 2018?
Most states asked for recent pay stubs (usually the last 4 to 6 weeks), employer letters, or prior-year tax returns. Self-employed parents typically needed a tax return plus a current profit-and-loss statement. Some states ran electronic data matches against wage reporting systems to verify income at application or redetermination. The exact documentation rules varied by state.
If a family had two children in care in 2018, did the co-pay double?
No. Most states set co-pays so the family paid one total amount for the household, not a per-child charge times the number of children. A second child in care usually added a modest increment, not a full second co-pay. The exact structure lived in each state's published co-pay schedule.
What income was excluded from the CCDF eligibility calculation in 2018?
Most states excluded SNAP, WIC, housing assistance, and other means-tested benefits. Many also excluded income earned by students under 18 and one-time payments like tax refunds. The exact exclusion list came from each state's CCDF State Plan. If you're unsure, ask the state agency for its income calculation worksheet.
How often were income categories and co-pay schedules updated in 2018?
States submitted new CCDF State Plans every two years. Within a plan period, they could amend fee schedules, but major income category changes needed an amendment approved by ACF. Many states refreshed FPL-based thresholds every year to track the federal poverty guideline updates, even without a full plan amendment. Check your state's subsidy agency for the exact update history.
Where can I find archived 2018 state fee schedules for a retroactive appeal?
Ask your state's child care subsidy agency directly for the specific 2018 fee schedule and co-pay table, naming the date range. ACF keeps archives of approved CCDF State Plans at acf.hhs.gov. Child Care Aware of America's 2018 annual cost report also compiled comparative state eligibility data and is downloadable from their website.
Did work activity hours affect which income bracket a family was placed in?
Work activity hours didn't change the income bracket, but they did set how many hours of subsidized care a family could get. A parent working 20 hours a week usually got a part-time authorization even if their income qualified them for full-time care. Income set the co-pay. Work activity documentation set the care hours.
How were income categories different for tribal CCDF programs compared to state programs?
Tribes with direct CCDF grants had more flexibility than states. They could set income thresholds, family definitions, and co-pay structures around tribal membership and tribal priorities, all inside the federal 85% SMI ceiling. Many tribal programs used simpler brackets or minimal co-pays compared with state sliding-scale schedules.
What happened to a family's eligibility in 2018 if their income changed mid-year?
Under the 2014 CCDBG Act rules in effect in 2018, states had to keep families eligible for at least 12 months without a full redetermination, which cut the mid-year drops common before the law. Families were often still required to report large income jumps above a threshold. The state could adjust the co-pay or authorization without ending assistance if income rose only moderately.
Is 2018 CCDF data relevant if I'm dealing with a current subsidy situation?
Only if the situation ties to 2018, like an audit, an overpayment dispute, or a retroactive review. Current CCDF rules use current income categories and co-pay schedules. Income thresholds, FPL figures, and co-pay brackets have all changed since 2018. Always use the fee schedule that was in effect during the period under review.
Could a state deny eligibility even if a family's income was below the threshold?
Yes. CCDF was not an entitlement program in 2018. States could close waiting lists or freeze enrollment when funding ran out, even for families who met income and work requirements. A family under the income ceiling was eligible on paper but could still be denied or waitlisted. Provider contracts could also be limited by available funding.
How did the 2018 income categories affect provider reimbursement rates?
The family income category set the co-pay you collected from the family. The state's market rate ceiling set the maximum total payment (co-pay plus state reimbursement). If the state reimbursement rate came in below your private-pay rate, you absorbed the gap. You could not charge subsidized families more than private-pay families for the same care.
Sources
- U.S. Department of Health and Human Services, Office of Child Care, CCDF Regulations (45 CFR Part 98): Federal CCDF rules set the 85% SMI ceiling, required gross income counting, and established qualifying work activities for eligibility
- Child Care and Development Block Grant Act of 2014 (Pub. L. 113-186), Office of Child Care summary: The 2014 CCDBG Act required 12-month continuous eligibility and public posting of fee schedules; fully in effect for 2018 State Plans
- Urban Institute, "Understanding the Child Care and Development Fund: Eligibility, Applications, and Unmet Need": Median state entry eligibility limit was approximately 150% FPL in 2018, with a wide range across states
- Child Care Aware of America, "The US and the High Cost of Child Care: 2018 Report": Annual center infant care costs ranged from $5,178 in Mississippi to $23,089 in Washington D.C. in 2018; about one-third of states met the 75th percentile reimbursement benchmark
- U.S. Department of Health and Human Services, ASPE, 2018 Poverty Guidelines (Federal Register Vol. 83, No. 12): 2018 Federal Poverty Level figures by household size used as eligibility anchors in most state CCDF programs
- Administration for Children and Families, Office of Child Care, CCDF State Plans archive: ACF maintains archived CCDF State Plans including the 2018-2019 period plans submitted by all states, territories, and tribes
- Office of Child Care, CCDF Final Rule 2016 (81 FR 67438): The 2016 final CCDF rule implementing the 2014 CCDBG Act was the regulatory framework governing 2018 State Plans and eligibility structures
- Office of Child Care summary of the CCDBG Act of 2014, family co-payment provisions: The CCDBG Act framework limited family co-payments to no more than 7% of family income
- Office of Child Care, Tribal CCDF Program overview: Tribal CCDF Lead Agencies have separate State Plan-equivalent documents and additional flexibility in setting income categories within federal ceilings
- Internal Revenue Service, Child and Dependent Care Credit information: Federal child care tax credit provides additional offset for child care costs and interacts with subsidy receipt