An in-home daycare contract is an agreement between a parent(s) and an in-home daycare service provider (caregiver), which defines the extent of services to be provided and at what cost. In-home. This type of daycare is provided at home, usually the caregiver’s home. This setup helps the children feel more comfortable due to the familiar home environment. It is a lesser formal daycare. It is alternatively referred to as family child care.
Home-Based Daycare Vs Center-Based Daycare
The more or less obvious difference between a home-based and center-based daycare is the location where the daycare services are being provided. For home-based Daycare, child(ren) are looked after in a residential place such as the home of the service provider, where else for center-based Daycare, the child(ren) are looked after in a commercial location as a group.
Home-based Daycare is characterized by;
Center-based Daycare is characterized by;
The Purpose of An In-Home Daycare Contract
A daycare contract is very essential in ensuring a child receives quality daycare, and you are protected should you decide to leave your child(ren) in the hands of an in-home caregiver or choose to look after someone’s child(ren).
To go into details about this point, we shall look at the several aspects of in-home Daycare addressed by an in-home daycare contract:
A child’s safety should be a priority for both the parent and the caregiver. Accidents can happen at any point in in-home daycare despite extra precautions within the home. A contract helps outline who is liable when certain events are to occur.
Since in-home Daycare will often come at a cost, the expected payments are outlined in the contract. The breakdown of expenses expected is given to help the parent clearly understand what they are paying for. Other details to be included are the provider’s preferred method of payment, expected date of payment, and the total amount expected. Information such as how late payments are to be handled should be provided, for example, will there be interest and at what percentage.
The contract should also address the child care services provided in the in-home daycare, such as supervision, daily meals, activities such as games, etc. Where extra services such as tutoring, art, sports, etc., can be provided, they should be outlined in the contract. This in-home daycare contract helps both parties state what they expect from the other.
Enhance early childhood learning
A contract acts as an assurance that the child(ren) gets a reasonable standard of care as the provider is legally obligated to ensure the services promised are delivered. The agreed-upon services are routine activities that are directed towards improving the quality of early childhood learning to the child. This ensures the children are in an environment that is almost similar to that which is provided under their parent guardianship.
Acts as proof of services provided
At the end of the agreement, the contract acts as proof of what daycare services and when they were provided. It is in an official document and can legally be referenced should need be.
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Most Important Terms and Details of the Contract
It is in everybody’s interest that the contract is written to effectively serve its purpose. How to achieve this is by ensuring that all the relevant information is incorporated. Now to answer the question of what you should include, below are some of the items one should focus on.
These items include:
Child, provider, and parent information
The contract must clearly state who is the involved provider, parent, and child. The information that should be given is the parent’s name, place of employment, and contact information of the parent or guardian. Contact information includes home address, phone number, email, and work number. This information is important during emergencies. Additional information like the child’s nickname and passport photos can be given. The age of the child(ren) should also be given.
These are the conditions that the parent/guardian should observe when making payments. For example, some in-home day caregivers may prefer payment in cash rather than check.
Some of the methods of payments include;
- Money Order
Both parties should state their preferred means, and an agreement is reached on the most convenient method.
Activities & scheduling information
The contract addresses all the activities that are included in the daily program. This includes dropping off and pick-up times, snack times, tutoring subjects available, etc. Having a program helps the parent determine if it fits their schedule and if it is what they want for their children. Having a schedule helps with the planning of routine activities such as pick-ups so that the provider can charge extra for any additional hours. This should also include the days of the week when daycare services are to be provided.
Additional terms and conditions
Further concerns that either party would have could be highlighted in the contract. For example, if the providers are expected to be absent during certain holidays, they can declare it in the contract. Responsibilities the in-home daycare providers wish to be exempted from, like the child’s(ren) attire needs, medications, and discipline cases, should be stated in the in-home daycare contract.
Contract termination policies
As an in-home daycare contract is a temporary contract, it is important for it to have a section describing circumstances under which the contract can be terminated.
The contract can be terminated due to some reasons such as;
- Unsatisfactory daycare services
- Persistent late payments
- Mistreatment of the child(ren)
Where a notice is needed before either party terminates the contract, it should be proclaimed. Each party should observe the termination policies; else the other party can terminate the contract without prior notice.
Common home daycare tax deductions
Some parents are eligible for tax deductions to help them cater to expenses that come with Daycare. For example, a tax deduction of up to $1050 is given for single parents and $2100 for both parents.
Important information about the cost of in-home daycare services is a must to be included in the contract.
This information includes;
- Payment rate and schedule: the payment rate is given in terms of $/hour or daily, weekly, or monthly per child. This simplifies budgeting for Daycare. The date when payment is expected should also be given; for example, is it after every two weeks or monthly.
- Overtime rates, late fees: Some parents could, from time to time, drop off children early or pick them up late. These periods are considered as overtime, and the provider is justified to charge extra. The amount per hour that they would charge for overtime should be stated. In cases where the parent makes late payments, in-home daycare providers should declare how this situation would be handled, whether there will be a fine and how much; this is often given as a percentage.
- Any additional fees: During the time the child(ren) is with the in-home caregiver, unprecedented costs may arise, and to cover these expenses, the provider may wish to be compensated; how to go about this should be clearly outlined in the contract. Also, costs such as registration fees are part of additional fees.
- Deposits: Some in-home daycare providers require a deposit before they can commence with their responsibilities. If this is the case, it should be addressed in the contract.
The in-home daycare contract should address the steps that should be taken should termination be necessary at any one point of the whole process.
These procedures should include;
- The in-home daycare provider’s right to end the arrangement for any reason with a specified period of notice. Some situations that may prompt an in-home daycare provider to terminate a contract include; a child’s behavior, a child being picked up late for a specified number of times, late payment for a given length of time, etc.
- A statement requiring payment during the termination period, regardless of the child’s attendance. Should there be a need for termination, a statement highlighting that the parent is still obligated to compensate the provider for inconveniences should be given in the contract.
- The in-home daycare provider’s right to terminate care without notice if a parent misses payments. Ordinarily, when a parent defaults on payment and does not make an effort to resolve the issue, the provider can terminate the contract without notifying the parent or guardian. This should be clearly stated in the contract.
In-Home Daycare Expenses Deductions on a Tax Return
As earlier stated, daycare expenses are deducted from tax returns. One can use the IRS Form 2441 file to determine their annual child care tax credit. Nevertheless, the question still remains, how are these deductions calculated?
Below are guidelines on how:
The Child Care Tax Credit
This deduction is given as a percentage of a parent’s wages, with the maximum being 35% of $3000 per parent. Since this percentage will vary with a parent’s income,
Below are the variations for different wages:
- $0 to $15,000: 35%
- $15,000 to $17,000: 34%
- $17,000 to $19,000: 33%
- $19,000 to $21,000: 32%
- $21,000 to $23,000: 31%
- $23,000 to $25,000: 30%
- $25,000 to $27,000: 29%
- $27,000 to $29,000: 28%
- $29,000 to $31,000: 27%
- $31,000 to $33,000: 26%
- $33,000 to $35,000: 25%
- $35,000 to $37,000: 24%
- $37,000 to $39,000: 23%
- $39,000 to $41,000: 22%
- $41,000 to $43,000: 21%
- $43,000+: 20%
For example, for a single parent making $25000 per year, their tax deduction would be 30% of $3000, equal to $900.
Limits and exculsions
It is important to note that these deductions are meant for parents with children below the age of thirteen (13). Tax deductions would still be applicable for parents with physically or mentally disabled children.
Parties that Could Use an In-Home Day Care Contract
Looking after a child or children is faced by a lot of unpredicted circumstances, and like in any other transaction, an in-home daycare contract is important in protecting the involved parties from the child to the parent and the caregiver.
The parties includes:
Parents or guardians
For a parent, it acts as an assurance that the caregiver(s) in an in-home daycare center understood their expectations, and in case they are not met, a parent can hold the caregiver accountable. It also acts as proof of a temporary transfer of guardianship duties from the parent to the caregiver such that should harm come to the child, the caregiver is the one to be held responsible.
Caregiver (preferred caregiver to Individuals )
For an in-home caregiver, a contract outlines the services they can provide and protects them should there be claims of services other than those stated in the contract. It also acts as proof of the parent’s obligation, such as payment in this transaction, and a caregiver can rightfully take a legal course of action should the parent fail to fulfill their obligations.
Organizations that offer child care services, for example, to their employees can utilize home daycare contracts to declare the services they are able to offer to children. Parents can then compare the services being provided to their expectations and determine whether to register their children.
Coming up with a professionally written in-home daycare contract can be tasking for a parent or caregiver planning to use one for the first time. Therefore, one may often find themselves using a template as a guide to determine what needs to be included. With that in mind, we have provided you with free detailed in-home daycare contract templates that you can use at your convenience. Download now and get started!
For most parents these days, due to their busy schedules, at one point, they will require the help of a caregiver. Despite in-home Daycare being a bit less formal than center-based, a contract should be part of the process to ensure the child(ren) get quality daycare. The contract should show the parties bound by the agreement, services being provided, payment information, and the termination procedure. As a parent, always check for tax deductions before filing for taxes. With the information discussed in this article, any person in need of crafting an in-home daycare contract can do so with templates as a guide. All the best.