Free tool · home daycare
Daycare time-space percentage calculator
For family child care providers who use part of their home for daycare. Enter your hours and square footage to get the time-space percentage that goes on IRS Form 8829, figured the way Publication 587 describes, including exclusive-use rooms.
Your time-space percentage
29.55%
| Hours used for daycare (line 4) | 3,090 |
|---|---|
| Hours available (line 5) | 8,760 |
| Time % (line 6) | 35.27% |
| Regular-use area % | 62.50% |
| Regular-use area % × time % | 22.05% |
| Exclusive-use area % | 7.50% |
| Time-space % (line 7) | 29.55% |
You have an exclusive-use area, so the Form 8829 instructions call for the special computation: enter the combined percentage on line 7, write "See attached computation" above it, and attach a statement showing the math above.
Business portion of $1,800.00 × 29.55% = $531.83
A planning estimate, not tax advice. Confirm your numbers with a tax professional.
What the time-space percentage is
Most home-based businesses can deduct home expenses only for space used exclusively for business. Family daycare is an exception. If you meet the licensing rules (you have applied for, been granted, or are exempt from a license, certification, registration or approval as a family or group daycare home under your state's law), you can use space your family also uses. Because that space is shared, the deduction is limited to the share of it the business uses, measured in both time and space. The result is your time-space percentage. It's explained in IRS Publication 587 under "Daycare Facility", and it feeds Part I of Form 8829.
How the calculator works
Regular-use space % = square feet used regularly for daycare ÷ total square feet
Time-space % = regular-use space % × time %
With exclusive-use rooms: exclusive sq ft ÷ total sq ft + (regular-use space % × time %)
If you started or stopped providing daycare partway through the year, the hours available are 24 × the number of days the home was available for daycare, not the full year. The time percentage can't go above 100%.
What counts as "hours used for daycare"
Count all the hours your home is used for the daycare business, not just the hours children are there. That includes time spent in the home on the business when no children are present, such as preparing meals and activities, cleaning up afterward, and meeting parents. Publication 587 also says that a room which is available throughout each business day and regularly used in the business counts as used for daycare throughout each business day.
Because hours make a big difference to the result, keep a record: sign-in sheets or attendance logs for the hours children are in care, and a simple calendar or log of your prep and cleanup time. A weekly estimate is a good starting point. A month-by-month log of actual hours is stronger.
Square footage: regular use vs exclusive use
- Total square feet: all finished living space in the home.
- Regular-use space: areas children and the business use regularly that your family also uses, such as the living room, kitchen, playroom, nap areas and bathroom. Leave out rooms that are never used for daycare, like a bedroom that's off-limits.
- Exclusive-use space: rooms used for nothing but the daycare. They're counted at 100% of their share of the home, not reduced by the time percentage.
Exclusive-use rooms need a special computation
Form 8829's Part I assumes all the space is shared, so it can't handle a mix of exclusive and shared space on its own. The Form 8829 instructions ("Special Computation for Certain Daycare Facilities") tell you to add the exclusive-use percentage to the shared-space percentage (after multiplying that by the time percentage), enter the total on line 7, and attach a statement showing the computation. The calculator shows every step so you can copy it into that statement.
A worked example
A provider is open 11 hours a day, 5 days a week, for 50 weeks (2,750 hours). She spends 6 hours a week on prep and cleanup (300 hours) and 40 other hours on business in the home, for a total of 3,090 hours. In a 365-day year that's 3,090 ÷ 8,760 = 35.27% time.
Her home is 2,400 sq ft. 1,500 sq ft is used regularly for daycare and shared with the family (62.5%), and a 180 sq ft playroom is used only for daycare (7.5%). Her time-space percentage is 7.5% + (62.5% × 35.27%) = 29.55%. With $1,800 of utilities, the business share is about $531.83.
What you use the percentage for
The percentage is applied to shared home expenses on Form 8829, such as utilities, rent, mortgage interest, real estate taxes, homeowner's insurance, general repairs and depreciation. Form 8829 has its own ordering rules and an income limit, which this calculator doesn't apply. Expenses that are 100% for the daycare (for example, toys and supplies used only by the daycare children) are deducted in full on Schedule C and don't use the percentage. For items your family and the daycare share, ask your tax professional how to apply it.
Sources
- IRS Publication 587, Business Use of Your Home, "Daycare Facility": irs.gov/publications/p587
- Instructions for Form 8829, lines 1–7 and "Special Computation for Certain Daycare Facilities": irs.gov/instructions/i8829
This page is general information, not tax advice. Tax rules change and your situation may differ, so confirm with a tax professional before you file.
Track it all year, not just at tax time
The Home Daycare Money Workbook has this calculation built in (weekly estimate or a month-by-month log). It applies your time-space % to shared expenses automatically, and it also tracks tuition, attendance, meals (standard meal rates), mileage and year-end parent statements in Excel or Google Sheets.