Last updated 2026-07-09
TL;DR
You can run a daycare from your home in every U.S. state, but you almost certainly need a license once you care for more than one or two unrelated children. Requirements vary sharply by state: ratios, square footage, background checks, training hours, and inspections. Expect startup costs of $1,000 to $10,000 and annual revenue of $20,000 to $60,000 depending on capacity and local rates.
Can I run a daycare from my home?
Yes. Every state allows some form of home-based child care. The umbrella term is "family child care home" (FCC), and it covers care provided in the provider's own residence for a small group of children. [1]
The catch is the line. Almost every state draws one somewhere between "neighbor helping out" and "operating a business." Cross it and you need a license. Most states set the threshold at caring for more than two or three unrelated children at the same time. Idaho and South Dakota historically ran light oversight for the smallest FCC homes, but that keeps shifting. Call your state licensing office before you assume you're exempt.
The fastest way to look up your exact exemption number is the National Database of Child Care Licensing Regulations, maintained by Child Care Aware of America. [2]
Don't trust what a neighbor or a Facebook group says the limit is. Those numbers drift as states rewrite rules, and the penalty for running unlicensed is usually a cease-and-desist plus fines.
What license do you need to run a home daycare?
You need a family child care home license from your state's child care licensing agency. Some states call it a "registration" or "certificate" instead, but the process is nearly identical. That agency might live inside the Department of Health, the Department of Social Services, or a standalone early childhood office, depending on where you are.
Here's the path, roughly in order:
1. Submit an application and pay a fee. Fees range from zero in a handful of states to $150 or more in others. 2. Pass a background check. Every adult in the home, more than you, usually needs a state and federal fingerprint-based criminal background check. [1] 3. Complete pre-license training. Hours vary a lot: California requires 15 hours of health and safety training before a license is issued, and some states require 30 or more. [3] 4. Pass a home inspection. An inspector checks square footage per child, safe sleep setup, smoke and CO detectors, first aid kit, locked medication storage, and outdoor play space safety. 5. Show proof of first aid and CPR certification. 6. Get liability insurance (required in some states, smart everywhere).
After the initial license, expect annual or biennial renewals, ongoing training hours (often 12 to 24 per year), and at least one unannounced inspection a year. [1]
Planning to take children whose families use Child Care and Development Fund (CCDF) subsidy vouchers? Federal rules add a layer. Your state must apply health and safety requirements covering CPR, first aid, safe sleep, and background checks to you. [4] Meeting your state's standard license almost always satisfies this on its own.
What are the child-to-caregiver ratios for a home daycare?
This is where state variation hits hardest. A licensed family child care home with one provider typically serves 6 to 8 children total, with a sublimit on infants (usually 2 without an assistant). A large family child care home, sometimes called a group family home, allows up to 12 to 14 children with two adults present.
Here's a sample of states to show the spread:
| State | Max children (1 adult, FCC) | Max infants | Source |
|---|---|---|---|
| California | 6 (up to 8 with waiver) | 3 of the 6 may be under 2 | CA Health & Safety Code §1596.78 |
| Texas | 6 | No specific sub-cap | DFPS licensing rules |
| New York | 6 | 2 infants | OCFS regs |
| Florida | 6 | 2 infants | DCF licensing standards |
| Illinois | 8 | 3 infants | DCFS rules |
These numbers aren't consistent across states, and they change. Verify against your state licensing agency's current published rules, not a third-party summary. Ratios tighten as ages drop because infant care demands more direct supervision.
One trap catches new providers: your own children under a certain age (typically under 6) often count toward your capacity. Factor that in before you decide how many slots you can sell.
Can I run a home daycare in an apartment?
Possibly. Two separate barriers stand in the way: your state's licensing rules and your lease.
On the licensing side, most states allow FCC homes in apartments as long as the unit meets the physical requirements: enough square footage per child (35 square feet of usable indoor space per child is a common floor, though some states require more), a safe outdoor or community play area, working smoke detectors on every level, and adequate bathroom access. [1] Clear those tests and regulators generally don't care whether you own or rent.
The lease is the harder wall. Most standard apartment leases ban operating a business from the unit, and a licensed daycare is unambiguously a business. Your landlord can evict you for it even if your state license is perfectly valid. Get written permission before you open, not after.
A few states protect you here. California Health and Safety Code Section 1597.40 says a landlord cannot prohibit a licensed FCC home through a lease or covenant, though they can require the provider to carry liability insurance naming the landlord as additional insured. [5] Check whether your state has a similar protection before you assume you're stuck.
Building permits and zoning are a third layer. If your city requires a home occupation permit or restricts child care in residential zones, an apartment address can complicate things even after the lease and license clear.
Can I run a home daycare out of a rental home?
Yes, with written landlord permission, and you usually have more room to negotiate than in an apartment. A single-family rental house is more likely to meet square footage and outdoor play requirements. Landlords of houses are often more open to adding a licensed FCC rider to the lease than a large property management company running a complex.
Get everything in writing. Ask for an addendum that permits operation of a licensed family child care home, spells out any insurance requirements (a $300,000 liability minimum is common), and addresses modifications you need for compliance, like cabinet locks or a safety gate. File that document with your license paperwork.
Your landlord's permission doesn't override local zoning. Some residential zones require a conditional use permit or special exception for a home daycare even in a house. Your city or county planning office can tell you in one call.
One thing people skip: a standard homeowner's or renter's policy does not cover business liability. You need a separate commercial child care liability policy, or a business rider. Many insurers write FCC-specific policies starting around $300 to $600 per year. Our home daycare insurance guide breaks down the coverage types.
Can I run a home daycare without a license?
In a narrow technical sense, yes, if you stay under your state's exemption threshold and meet every exemption condition. That window is smaller than most people assume.
Most states exempt care for one or two unrelated children in the provider's home, as long as no subsidy money is involved and you don't hold the care out as a business. Watch two neighbors' kids for pay under the threshold, and you may be operating legally without a license. [2]
The risks of going over that line are real. State agencies can fine you (in California, up to $150 per day per child [5]), order you to stop operating immediately, and in extreme cases push it to criminal charges. Your homeowner's or renter's insurance almost certainly won't cover an incident that happens while you run an unlicensed business. A child gets hurt, a parent sues, and you're personally on the hook.
You also can't take subsidy vouchers (CCDF, Head Start partnerships, state pre-K contracts) without a license. That income is significant. In many states, a full FCC home serving low-income families brings in $30,000 to $60,000 a year in voucher reimbursements alone. Staying unlicensed to dodge the paperwork costs you that revenue.
Get licensed. The process is bureaucratic, but it isn't unreasonably hard, and it puts you in a completely different legal and financial position.
Can I run a dog daycare from my home?
Dog daycare runs on a different regulatory track entirely. Your state's child care licensing office has nothing to do with it. You're looking at local zoning and business licensing instead, plus a kennel or animal care facility permit in some states.
The regulatory load for home-based dog daycare is generally lighter than child care. Plenty of people run a small dog daycare from home under a standard business license and a city home occupation permit. Some states require a kennel license once you board or care for more than a set number of dogs, often four or more.
Zoning is the biggest practical barrier. Noise ordinances and density rules in residential zones frequently cap how many animals you can keep on a property at once. Get a written ruling from your local planning department before you spend a dollar on fencing, crates, or marketing.
For a full breakdown of what home dog daycare involves, read our guide on doggy daycare. Thinking specifically about puppies? Our puppy daycare guide covers the age-specific care worth knowing before you take bookings.
What does it cost to start a home daycare?
Startup costs swing wide depending on what you already own and your state's physical requirements. Here's a realistic range:
Licensing and fees: $0 to $300. Some states charge no application fee, others closer to $150.
Background checks: $50 to $150 per adult in the home.
Required training: Free to $500, depending on whether your state offers required courses free through the licensing agency or routes you to paid providers.
First aid and CPR certification: Roughly $50 to $100 per adult.
Home modifications: Wide range. Outlet covers, cabinet locks, a childproof gate, and a compliant outdoor space run $200 to $2,000. If your outdoor space falls short, add fencing or equipment.
Equipment and supplies: Cribs, cots, high chairs, toys, books, art supplies. Budget $500 to $3,000 depending on ages served and what you already own. Compliant sleep equipment alone (one crib per sleeping infant) runs $150 to $300 per crib.
Insurance: Plan for $300 to $900 a year for a commercial daycare liability insurance policy. Don't skip this.
Total first-year estimate: $1,000 to $10,000. The low end is realistic for someone with a well-equipped home and state-offered free training. The high end fits someone starting from scratch with infants who need all new sleep equipment and real home modifications.
Child Care Aware of America's 2023 report found the national average annual cost of center-based infant care was $15,417, while family child care averaged $10,575 per infant. [6] Home providers charge less than centers as a rule, but their operating costs run lower too, so margins can land in the same neighborhood.
For what families pay and what you can charge, the daycare cost guide has current rate data by state.
How much money can you make running a home daycare?
Revenue comes down to your licensed capacity, your local market rate, and how many slots you fill. Run a simple example.
Licensed for 6 children in a midsize U.S. city at $200 per week per child: 6 kids x $200 x 50 weeks = $60,000 gross.
Expenses eat $15,000 to $25,000 of that: food (CACFP reimbursements help, more below), supplies, insurance, training, and the business share of your home utilities. Net income in that scenario realistically lands at $35,000 to $45,000.
Infant care pays more. In high cost-of-living metros, $350 to $500 per week per infant is common. In rural areas, $100 to $150 per week is closer to market.
The Child and Adult Care Food Program (CACFP) is money most new providers leave on the table. Serve meals and snacks that meet USDA nutrition standards and the federal government reimburses you per meal. [7] A 6-child home serving breakfast, lunch, and an afternoon snack can pull in $300 to $600 a month in CACFP reimbursements, depending on the income mix of the families you serve. [11] That's real money for food you were buying anyway.
For what parents nearby actually pay, the part time daycare article covers rate structures for partial-week enrollment, a common model in home daycare.
What do home daycare inspections actually check?
State inspectors work from a checklist, and most states publish it. Pull yours before you open so you're not guessing.
Common inspection points across states:
Indoor safety: Outlet covers on all accessible outlets, cabinet locks on cleaning products and medications, no choking hazards within toddler reach, working smoke detectors on every level, a working CO detector if you have gas appliances or an attached garage, a fire extinguisher, and clear exits.
Safe sleep: Infants under 12 months sleep on their backs, in their own crib or pack-n-play, with no soft bedding, bumpers, or positioners. The American Academy of Pediatrics safe sleep guidelines are referenced directly in many state regulations. [8] This is the area where inspectors write the most corrections.
Outdoor space: Enclosed play area, no tripping hazards, no peeling paint on equipment, adequate shade.
Food and medication: Medications labeled with each child's name, stored locked and out of reach. Food stored properly. If you're in CACFP, meal records ready for review.
Documentation: Current license posted where parents can see it, attendance records (sign-in and sign-out sheets), emergency contacts and authorization forms for each child, immunization records or exemptions on file.
Your credentials: Current CPR and first aid cards, training hours documented.
Unannounced inspections can land any day. Treat every day like an inspection day and you'll never sweat one.
For cleaning protocols that keep you compliant between visits, the daycare cleaning guide covers disinfection schedules and product safety for spaces with young children.
What policies and paperwork does a home daycare need?
Good paperwork protects you better than anything else. Here's the core set to have signed before your first child walks in:
Enrollment agreement / parent contract: Hours, fees, late pickup fees, notice period for withdrawal, holidays. Written and signed before day one.
Health and illness policy: What symptoms keep a child home. Most states require one. Be specific (fever over 100.4°F, vomiting in the past 24 hours, and so on).
Emergency authorization form: Who to call when you can't reach a parent, plus authorization to seek emergency medical care.
Medication administration form: If you give any medication, get written parental authorization for each medication and each dose.
Immunization records: Most states require proof children are up to date or hold a valid exemption on file.
Photo and social media release: Whether families consent to photos being taken and shared.
Safe sleep plan: For any infant in care, a written agreement with parents on sleep position and environment.
Fee schedule: Clear, in writing, signed by both parties.
Keep a physical file per child. Back it up digitally. Regulators want to see these at inspection, and parents will dispute payment terms months later if nothing is in writing.
Wondering where sloppy documentation leads? The minnesota daycare fraud case shows what happens when financial controls and attendance records get ignored at scale.
How do you market a home daycare and fill your slots?
Word of mouth still drives home daycare. One happy family refers two more. Treat every current family as a marketing asset: clear communication, zero billing surprises, genuine warmth.
Beyond referrals:
Child Care Resource and Referral agencies (CCR&Rs): These state-funded agencies keep provider directories that families actively search. Get listed. It's free, and the families coming through are already shopping for care. [9]
Care.com and similar platforms: Useful for early visibility, but expect a subscription fee and inquiries that fizzle. Worth trying for the first 6 months while you build referrals.
Facebook neighborhood groups: Free and hyper-local. A short intro post with your license number, capacity, and ages served does the job.
Google Business Profile: Set one up with your city and neighborhood in the description. Parents search "home daycare near me" constantly.
Your state's subsidy list: Enroll as a CCDF-approved provider and subsidy-eligible families can choose you. That opens a large pool of parents who often have fewer options.
Set your rates at or slightly above the local median, never below. Providers who undercut the market fill slots with families who expect endless flexibility, and those providers often don't make it past year two. Know your cost per child and price above it.
For how parents compare care options, the daycare guide on costs, licensing, and rules gives useful context.
What taxes does a home daycare provider pay?
You're self-employed, so you pay self-employment tax (15.3% on net earnings up to the Social Security wage base) on top of regular income tax. [10] Budget for quarterly estimated payments so April doesn't come with a penalty.
The upside is home daycare comes with real deductions:
Time-space percentage: The IRS lets you deduct home expenses (mortgage interest or rent, utilities, insurance, repairs) proportional to the space and time your home runs as a business. The formula is (square feet used for daycare / total square feet) multiplied by (hours daycare operates / total hours in the year). Most home providers land between 25% and 40%. [10]
Food deduction: Deduct food costs using actual costs (with receipts) or the IRS standard meal rate. CACFP reimbursements reduce your deductible amount.
Supplies, toys, and equipment: Deductible as business expenses.
Training and professional development: Fully deductible.
Vehicle: If you transport children or run supply errands, mileage is deductible at the standard IRS rate (67 cents per mile in 2024, adjusted annually).
Get an accountant who knows home daycare. The Tom Copeland tax resources, published for years through Redleaf Press, are the practical standard for FCC tax guidance, though you should check specifics against current IRS publications. [10] A good accountant pays for themselves in the first year.
If you want to track licensing deadlines, training hours, and inspection prep in one place, the ChildCareComp compliance toolkit is the kind of overhead worth systematizing early.
Frequently asked questions
Can I run a daycare from my home if I have pets?
Yes, but pets must be vaccinated, and most states require animals separated from children during care hours or kept in a space children can't access. Dogs that pose any bite risk are a liability problem even where regulators don't explicitly prohibit them. Keep vaccination records and have a clear separation plan ready to show an inspector.
Can I run a home daycare in an apartment?
Possibly. State licensing rules often allow it if the unit meets square footage, smoke detector, and play space requirements. The bigger barrier is your lease, since most prohibit business operations. In California, state law limits a landlord's ability to ban a licensed family child care home from a rental unit. Check both your lease and your state's renter protections before signing anything.
Can I run a home daycare out of my rental home?
Yes, with written landlord permission and a lease addendum that authorizes it. Standard leases prohibit business operations, so a verbal agreement won't protect you. Also check local zoning: some residential zones require a home occupation permit or conditional use approval for child care, whether you rent or own.
Can I run a home daycare without a license?
Only if you stay under your state's exemption threshold, usually one or two unrelated children without subsidy funding. Go over it and you're operating illegally. Penalties include fines (up to $150 per child per day in California), forced closure, and personal liability if a child is injured. Licensing is worth the effort.
Can I run a dog daycare from my home?
Yes. Dog daycare uses a different regulatory path than child care: typically a local business license, a home occupation permit, and possibly a kennel permit from your city or county once you care for more than a few dogs. Zoning and noise ordinances are the main constraints. The child care licensing office isn't involved at all.
How many children can I watch in a home daycare?
It depends on your state and license type. Most states allow 6 to 8 children with one adult provider, with strict sub-limits on infants (often 2 to 3 max). Your own children under a certain age often count toward that limit. A large or group family child care license with two adults allows up to 12 to 14 children in some states.
How much does it cost to start a home daycare?
Plan on $1,000 to $10,000 for startup. That covers licensing fees, background checks, required training, CPR certification, home safety modifications, supplies, and liability insurance. The low end is realistic if you already have a suitable home and your state offers free required training. Infant care adds cost because you need a compliant crib for each sleeping infant.
Do I need insurance to run a home daycare?
Yes, and your homeowner's or renter's policy does not cover business liability. You need a separate commercial child care liability policy. Some states mandate it for licensure, and every state should for practical reasons. Policies for a small FCC home typically run $300 to $900 a year. A single uncovered incident can wipe you out personally.
What is the CACFP and how does it help home daycare providers?
The Child and Adult Care Food Program (CACFP) is a USDA-funded program that reimburses licensed child care providers for meals and snacks meeting nutrition standards. A 6-child home daycare can realistically receive $300 to $600 a month. Enrollment runs through your state agency. It's one of the most underused income sources for new FCC providers.
What background checks are required for a home daycare license?
Most states require fingerprint-based criminal background checks through both state and FBI databases for the provider and every adult living in the home. Some states also require a child abuse and neglect registry check. These aren't optional: federal CCDF rules mandate background checks for providers receiving subsidy payments, and most states apply the same standard to all licensed homes.
How do home daycare inspections work?
Your state's licensing agency conducts at least one inspection before issuing your license and at least one unannounced inspection per license period after that. Inspectors check physical safety, safe sleep compliance, outdoor space, medication storage, documentation (attendance records, immunization files, emergency contacts), and your posted license and credentials. Most states publish their inspection checklist publicly.
Can I accept subsidy vouchers (CCDF) as a home daycare provider?
Yes, if you have a valid license and meet your state's health and safety standards, which most licensed FCC homes already satisfy. Enrolling as a CCDF-approved provider opens your slots to families using government child care assistance. Contact your state's Child Care and Development Fund administrator or your local Child Care Resource and Referral agency to get on the approved provider list.
What taxes do home daycare providers pay?
Self-employment tax of 15.3% on net earnings, plus regular federal and state income tax. Pay quarterly estimates to avoid IRS penalties. Major deductions include the time-space percentage of home expenses, food costs, supplies, training, and vehicle mileage. An accountant who knows family child care tax rules will almost always recover more than their fee in the first year.
How do I get my first clients for a home daycare?
Get listed with your local Child Care Resource and Referral agency right away, since families actively search those directories and it's free. Set up a Google Business Profile, post in neighborhood Facebook groups, and enroll as a CCDF-approved provider to reach subsidy-eligible families. Word of mouth from your first two or three families drives most growth after that.
Sources
- U.S. Department of Health and Human Services, Office of Child Care: Licensing requirements for family child care homes including background checks, training, and inspection standards
- Child Care Aware of America: National Database of Child Care Licensing Regulations: State-by-state licensing thresholds and exemption rules for family child care homes
- California Department of Social Services, Child Care Licensing Program: California requires 15 hours of health and safety training before a family child care home license is issued
- U.S. Department of Health and Human Services, Office of Child Care: CCDF Policy Guidance: Federal CCDF rules require states to have health and safety standards covering CPR, first aid, safe sleep, and background checks for providers receiving subsidy funds
- California Legislative Information: Health and Safety Code Section 1597.40: California law limits landlords from prohibiting licensed family child care homes in rental units; fines for unlicensed operation up to $150 per day per child
- Child Care Aware of America: Demanding Change: Repairing Our Child Care System (2023 Report): National average annual cost of center-based infant care was $15,417; family child care averaged $10,575 per infant annually in 2023
- USDA Food and Nutrition Service: Child and Adult Care Food Program (CACFP): CACFP reimburses licensed child care providers per meal served that meets USDA nutrition standards
- American Academy of Pediatrics: Safe Sleep Guidelines: AAP safe sleep guidelines (back to sleep, firm surface, no soft bedding) are referenced directly in many state child care licensing regulations
- Child Care Aware of America: Child Care Resource and Referral Network: State-funded CCR&R agencies maintain provider directories that families use to search for licensed care
- IRS Publication 587: Business Use of Your Home: Time-space percentage method for home daycare providers to deduct home expenses; self-employment tax at 15.3% on net earnings
- USDA Food and Nutrition Service: CACFP: Per-meal reimbursement rates for licensed family child care homes participating in CACFP
- U.S. Department of Health and Human Services, Office of Child Care: CCDF Policies Database: State-by-state CCDF policy data including background check requirements and provider eligibility rules