To get paid by the state for babysitting, you enroll as an approved provider in your state’s childcare subsidy program, pass the required background checks, complete basic health and safety training, and then bill the state for care you give to a child whose family qualifies for the subsidy. The program is funded largely through the federal Child Care and Development Fund, and every state runs its own version. Your path through it depends almost entirely on who you plan to watch and how many children will be in your care.
Who Can Get Paid, and Under Which Rules
Federal regulations sort eligible providers into two broad groups, and where you land shapes everything that follows.
The lighter path is for relative providers. If you are at least 18 and related to the child by blood, marriage, or court order, states must let the parent choose you and pay you through the subsidy program. Qualifying relationships include grandparents, great-grandparents, aunts, uncles, and siblings who live in a separate home. A grandmother watching her grandchildren while their parent works does not need a childcare license. She does need to register with the state, clear a background check, and complete health and safety training.
The heavier path is licensed or regulated care: childcare centers, registered family childcare homes, and group homes that meet state licensing standards. If you plan to care for unrelated children or open your home to the public, this is the category you’ll be in. Licensing brings inspections, staff-to-child ratios, facility requirements, and ongoing compliance.
Most people asking how to get paid by the state to babysit are looking at the relative or license-exempt path. That’s the version described in the most detail below, with the licensing path noted where it diverges.
How to Apply
Start by contacting your state’s childcare subsidy agency. In most states this is the Department of Social Services, the Department of Human Services, or an agency with a similar name. Childcare.gov links to the right agency in every state. Often the family receiving the subsidy triggers the process by naming you as their chosen provider on their application, and the agency then reaches out to you to open enrollment.
For a relative or license-exempt registration, you’ll be asked to provide:
- A driver’s license or state-issued ID and your Social Security number.
- Proof of where you live, such as a utility bill or lease dated within the last 60 days.
- Signed consent forms for the background checks.
- Proof that you’ve completed the required health and safety training.
- A current CPR and first aid certification.
Once the background check clears, enrollment often wraps up within a few weeks.
Licensing takes longer. It typically begins with an orientation session, followed by an online provider portal account, an application with supporting documents, and at least two walk-through visits from a licensing specialist who checks safety, measures space to calculate your capacity, and looks for hazards. You’ll also submit tax information (a recent federal return or your Employer Identification Number), a direct deposit authorization, and evidence that your home meets fire safety and health standards. Plan for the full licensing process to take several weeks to a few months. Online applications tend to move faster than paper ones. Initial application fees are generally modest, and annual licensing fees scale with the number of children you’re approved to serve.
Your state’s childcare resource and referral agency exists specifically to walk providers through these steps at no cost, and using that help can shave weeks off your timeline.
Background Checks You’ll Have to Pass
Federal law requires every provider paid through the subsidy program to clear a comprehensive background check. This isn’t a patchwork of state rules. The required checks are:
- A national FBI criminal history check based on fingerprints.
- A search of the National Crime Information Center’s sex offender registry.
- Criminal record, sex offender registry, and child abuse and neglect registry searches in every state where you’ve lived in the past five years.
Fees for fingerprinting and processing usually run between $35 and $100, depending on where you live. Some states absorb the cost; others pass it to the provider.
A conviction does not automatically shut every door. States maintain their own lists of disqualifying offenses, though crimes against children, violent felonies, and sex offenses are disqualifying everywhere. Some states allow you to request a waiver for older or less serious convictions.
Training and Certification
Federal law requires all subsidized providers to receive pre-service training and ongoing education across at least ten health and safety topics. Those include prevention of infectious diseases and proper immunization, safe sleep practices and prevention of sudden infant death syndrome, administering medication with parental consent, responding to food allergies, building and physical safety, handling and storing hazardous materials, emergency preparedness, transporting children safely, recognizing and reporting child abuse and neglect, and first aid and CPR.
For relatives and license-exempt providers, the training is usually shorter than what licensed providers face and is often available online through the state’s childcare resource and referral agency. Almost every state requires a current CPR and first aid certification covering infants, children, and adults. Those certifications are valid for two years, so put the renewal date on your calendar.
What the State Will Pay You
Each state sets its own reimbursement rates, usually based on a market rate survey of what private-pay families are being charged in your area. Federal guidance has historically used the 75th percentile of local market rates as a benchmark, meaning rates high enough to cover what 75 percent of nearby providers charge. In practice, many states pay less. Federal data from recent state plans shows wide variation: some states reimburse at or above the 75th percentile for certain age groups, others fall below the 50th percentile. States below the 50th percentile are considered out of compliance with federal equal access requirements.
Rates vary by:
- The child’s age. Infant care pays more than preschool-age care.
- The type of care. Full-time, part-time, and before-and-after-school schedules pay differently.
- Your quality rating, if your state runs a quality improvement system. Higher ratings often bring enhanced rates.
One important point for the relative and license-exempt path: these providers almost always receive lower rates than licensed providers. The gap can be 50 to 70 percent of the licensed rate.
Families typically owe a copayment, a share of the cost based on their income and family size. You collect the copayment from the parent, and the state covers the rest. If the state rate for your care is $150 a week and the family’s copayment is $30, the state sends you $120 and the parent pays you $30 directly.
Payments usually arrive by direct deposit, though some states still cut paper checks. Payment cycles run anywhere from weekly to monthly depending on the state.
Attendance Records Are Not Optional
States require providers to keep daily attendance records showing exactly when each child arrives and departs. Many states use sign-in and sign-out sheets that the parent or authorized pickup person completes. Some have moved to electronic attendance systems. Your payment is calculated from these records, and mismatches between what you report and the authorized care schedule can delay payments or trigger an audit. Falsifying attendance is treated as fraud and can bring repayment demands, disqualification from the program, and criminal charges.
Taxes You’ll Owe
This is where new providers get caught off guard. Childcare subsidy payments are taxable income. The state will issue you a Form 1099-NEC at the end of the year if your payments total $600 or more, which they will if you provide care for any meaningful stretch of time.
You are not the state’s employee. The payments count as self-employment income, which means you owe both income tax and self-employment tax (Social Security and Medicare at a combined 15.3 percent). You report the income on Schedule C. Because nothing is withheld from your payments, you’ll likely need to make quarterly estimated tax payments using Form 1040-ES to avoid a penalty at filing time.
The tax bill softens once you count deductions. If you provide care in your home, you can deduct a share of housing costs, including mortgage interest or rent, utilities, insurance, and repairs, based on the portion of your home used for childcare. Home-based daycare providers get a favorable rule: unlike most home-office deductions, the space does not have to be used exclusively for business. You calculate the deduction based on the percentage of time the space is used for care. Living rooms count when they’re doing double duty.
Other deductible expenses include food provided to the children (the USDA’s Child and Adult Care Food Program can supplement this), toys and educational supplies, liability insurance premiums, training and certification costs, and cleaning supplies. Keep receipts from day one. Many new providers discover how much they can write off only after losing a year of deductions to poor recordkeeping.
Insurance You Should Not Assume You Have
Standard homeowners and renters policies typically exclude injuries and incidents connected to a home-based childcare business. If a child is hurt in your care and the family sues, your personal assets could be exposed with no policy behind you. Most states require licensed home-based providers to carry liability insurance, and even where it isn’t required, experienced providers don’t skip it.
General liability coverage for a home daycare usually runs $450 to $2,000 per year depending on capacity and coverage limits. Professional liability insurance, which covers claims tied to care decisions rather than physical injuries, generally costs $750 to $1,200 annually. Both are deductible as business expenses.
Relative and license-exempt providers watching one or two related children face lower risk, and most states don’t require them to carry a separate business policy. If you’re caring for multiple children as a license-exempt provider, though, call your homeowners insurer about a business rider or a standalone policy.
Staying Approved
Getting approved is the starting line. Licensed providers face annual compliance work: a licensing fee, an updated declaration of compliance, continuing education hours in approved topics, and periodic inspections. Background checks must be renewed at set intervals, usually every five years, and new checks are triggered whenever you add staff or a new adult moves into a licensed family home. CPR and first aid have to be renewed every two years.
Relative and license-exempt providers carry lighter ongoing obligations, but you still need to keep the background check current, keep training and certifications up to date, and promptly report changes in your circumstances. A new address, a new household member, or a change in the ages of children you’re serving can all affect your approval.
If the state moves to revoke or suspend your provider status, you generally have the right to appeal. The appeal usually starts with an administrative reconsideration in writing, followed by the option to request a hearing before an administrative law judge. Deadlines to file are short, often 21 days or less from the date you receive the revocation notice, so if this happens, act quickly.