How to Start a Home Daycare in California: $73 or $140 License, 8 or 14 Children, No Local Business Tax

California makes it unusually easy to open a home daycare, and the reason has two parts. The state license is inexpensive: $73 for a small home caring for up to eight children, and $140 for a large home caring for 9 to 14 children. And state law bars cities from charging a business license, fee or tax for the privilege of operating a licensed family daycare home. Most California cities charge a local business tax on nearly every other kind of home business, so this is the biggest difference between a home daycare and most other home-based businesses in the state.

This guide walks through the process from the first zoning question to your first enrolled child. It covers the two license sizes, the required training, fire safety, and the business paperwork that sits around the license. Licensing is handled by the Department of Social Services, Community Care Licensing (CCL), not the Secretary of State, so CCL is the agency to start with.

What a Licensed Home Daycare Is

California calls these family child care homes. Under Health and Safety Code (HSC) 1596.80, a license is required to operate any child day care facility, and a family daycare home is a facility run in the provider's own home. The home can be owned, rented or leased. It can be a detached house, a townhouse, or a dwelling unit in a multifamily building where zoning allows residential use (HSC 1596.78).

A home daycare is separate from a child care center. If you plan to lease commercial space and care for a larger group, you are on a different path. This guide covers care in a home only.

Small or Large: Choosing Your Capacity

Your capacity count includes your own children under age 10. The two categories work like this:

License type	Children in care	Original application	Annual fee
Small family child care home	Up to 8, including your own children under 10	$73 for 1 to 8 children	$73
Large family child care home	7 to 14, including your own children under 10	$140 for 9 to 14 children	$140

The fee follows the number of children you are licensed for. A large home that cares for nine or more children pays the $140 tier (HSC 1596.803). A small home that goes up to eight children stays in the $73 tier.

Small home rules

A small home may care for up to six children without an additional adult. Seven or eight children are allowed without an additional adult only if all of these conditions are met (HSC 1597.44):

• At least one child in care is in kindergarten or elementary school, and a second child is at least six years old.
• No more than two infants are in care while more than six children are present.
• Each parent is told about the arrangement.
• If you rent or lease the home, the property owner gives written consent.

Large home rules

A large home cares for 7 to 14 children. Going above 12 children, up to 13 or 14, requires similar conditions (HSC 1597.465):

• A kindergarten or elementary school child is in care, and a second child is at least six years old.
• No more than three infants are in care while more than 12 children are present.
• Parents receive notice.
• If you rent or lease the home, the property owner gives written consent.

Other fees in the same section: $25 to change your licensed capacity, a $25 orientation fee for the department's family child care home orientation session, and half the application fee if the licensee moves to a new home.

Materials and Documents You Will Need

Gather these before you apply so you are not stopping midway through the process:

• Proof that the home is your residence, or a lease along with the property owner's written consent.
• Written owner consent if you plan to care for seven or eight children in a small home, or more than 12 children in a large home.
• Training certificates for the required health and safety courses (see Step 3).
• A fire extinguisher, smoke detector and carbon monoxide detector for a small home (HSC 1597.455).
• A floor plan showing the rooms you will use for care, so you can confirm which floors and exits apply.
• Payment for the application fee, and the $25 orientation fee when you schedule it.
• Background check paperwork for every adult living in the home. Ask CCL which forms and fingerprinting steps apply to you (Live Scan).
• Tuberculosis testing records. Confirm the current requirement and timing with CCL.

Step 1: Confirm Your Zoning and Lease

Start here, because it can end the project before you spend money. Under HSC 1597.45, a home used as a small or large family daycare is a residential use and a use by right for zoning purposes. The same section says a local jurisdiction may not impose a business license, fee or tax for the privilege of operating one. HSC 1597.40 also bars local rules that prohibit or restrict using a home as a family daycare.

Local governments can still apply height, setback and lot dimension rules, and health, safety and building rules, but only if those rules are identical to the ones applied to all other homes in the same zone (HSC 1597.45(e)). Ask the city or county planning department whether any general rules for your property type apply to your home.

If you rent, get the property owner's written consent before you apply, not after. Your lease should allow residential use with children in care. A verbal okay is not enough for the seven or eight child small home conditions or the large home conditions above 12 children.

Step 2: Complete the Required Training

The licensee who provides care must complete at least 15 hours of health and safety training. The training must cover pediatric first aid, pediatric CPR, and a preventive health course that includes recognizing and preventing infectious disease, injury prevention, and lead exposure prevention. For licenses issued on or after January 1, 2016, at least one hour must cover childhood nutrition (HSC 1596.866).

Two changes are scheduled. Starting January 1, 2026, the first aid or CPR course must cover anaphylaxis and the use of epinephrine auto-injectors. Starting October 1, 2027, 12 hours of continuing education per year are scheduled to begin. Confirm the current training rules with the Department of Social Services before you enroll in a course, because the requirements have changed over time.

Step 3: Set Up Fire and Life Safety

Fire safety requirements depend on your license size:

• Small home: You must have a fire extinguisher, a smoke detector and a carbon monoxide detector (HSC 1597.455).
• Large home: The home must meet State Fire Marshal standards for the exits and floors you use for care (HSC 1597.46).

Walk through your home and identify the exits and the floors children will use. Large homes often need a closer look at stairs, second floor use and exit routes. Ask CCL how the fire clearance is handled and what it requires, because the process, timing and costs are set by the agency and should be confirmed with them directly.

Step 4: Apply for Your License

Submit the application and fee to Community Care Licensing. Several steps follow the application. These include a fire clearance, a licensing visit to your home, tuberculosis testing, and Live Scan background checks for adults who live in the home. Confirm the timeline and the cost of each step with CCL, since these details can change and are not set in this guide.

Plan to attend the family child care home orientation session. The $25 orientation fee applies to that session. Ask CCL for the current schedule so you can complete it early in your planning.

Step 5: Decide Whether You Need a Business Entity

You do not need a business entity to run a home daycare. Many providers operate as sole proprietors. Forming an LLC or corporation can help separate personal and business assets and gives you a formal structure, but it adds state filings and taxes. Here is what the entity route costs:

• LLC: Articles of Organization (Form LLC-1) cost $70. Online filings are normally processed within about 5 business days or less, and paper filings take 10 or more business days. A name reservation costs $10 and lasts 60 days.
• LLC name rules: The name must include limited liability company, L.L.C. or LLC.
• Registered agent: An LLC must keep an agent for service of process in California, either an individual who lives in California or a corporation with the required certificate. The LLC must also keep an office in California.
• Franchise tax: An LLC organized or registered in 2024 through 2026 owes the $800 minimum annual franchise tax from its first year. An LLC whose first taxable year begins in 2027, 2028 or 2029 pays $400 in year one under RTC 17941(g)(2), so confirm the first-year amount with the Franchise Tax Board.
• LLC fee: Once California-source total income reaches $250,000, $500,000, $1,000,000 or $5,000,000, the LLC fee is $900, $2,500, $6,000 or $11,790.
• Statement of Information: Form LLC-12 costs $20 and is due within 90 days of filing the articles, then every two years during the six-month window ending on the last day of the anniversary month. The Franchise Tax Board assesses a $250 penalty if you miss it after a Secretary of State notice.

A corporation files Articles of Incorporation for $100 and a Statement of Information (Form SI-550) for $25 every year. A newly incorporated corporation or S corporation owes no $800 minimum franchise tax in its first taxable year. File online through bizfile Online at https://bizfileonline.sos.ca.gov/. Entity choice has tax consequences, so talk to a CPA before you decide.

Step 6: File a Fictitious Business Name if You Need One

If you operate under a name other than your own legal name, you need a Fictitious Business Name Statement. You file it with the county clerk-recorder in the county where your principal place of business is located. The filing has these requirements:

• File within 40 days of starting business.
• Publish the statement in a newspaper once a week for four weeks. The publication fee is separate from the filing fee.
• The statutory filing fee is $10, plus $2 per additional name or owner (Business and Professions Code 17929). Counties often charge more. Tehama County, for example, charges $31 plus $5 for each additional name.
• The statement expires after five years and must be refiled.

Details are at https://www.sos.ca.gov/business-programs/business-entities/fictitious-business-names.

Step 7: Check Your Tax and Employer Registrations

California has no general statewide business license. The Secretary of State issues none, and the CDTFA seller's permit is not a business license. A home daycare that sells no taxable goods usually has no reason to register with the CDTFA, but confirm this with the agency at https://www.cdtfa.ca.gov/. The seller's permit is free if you do need one. Sales tax in California is 7.25% statewide, plus district taxes that bring city rates to between 7.25% and 11.75%.

If you hire an assistant, you must register as an employer with the Employment Development Department (EDD), at https://edd.ca.gov/. California's state minimum wage is $16.90 in 2026 and is scheduled to rise to $17.40 on January 1, 2027. Verify this figure with the state before you set pay.

Step 8: Confirm Local Requirements

Because HSC 1597.45 bars a city or county from imposing a business license, fee or tax for operating a licensed family daycare home, you should not expect a local business tax bill for the daycare itself. Most California cities do charge a local business tax or registration certificate on other businesses, and the amount has no common formula, so the answer depends on the city. If a city asks you to register, ask for the legal basis in writing and cite HSC 1597.45. If the city keeps pressing, have a local attorney review the request.

Common Mistakes to Avoid

• Counting only the children you enroll. Your own children under 10 count toward your capacity.
• Exceeding six children without the conditions. Seven or eight in a small home, or more than 12 in a large home, needs the specific conditions and the owner consent where you rent.
• Relying on a verbal lease okay. Get written owner consent before you apply.
• Assuming an LLC avoids licensing. An LLC does not replace the CCL license. You still need it to care for children.
• Missing the 40-day fictitious business name deadline. Late filing puts your name at risk.
• Forgetting the $800 franchise tax. An LLC formed now owes it from its first year.
• Using old training information. Check the 2026 and 2027 training changes before you enroll.
• Treating this guide as the final rule. Fees, timelines and processes can change, so confirm each one with the named agency.

Expected Results

A licensed home daycare may let you care for children in a setting you control, and it may give you a predictable schedule and a clear legal footing from the start. Results depend on many factors, including local demand, your rates, your reputation, your hours and the quality of care you provide. No income level, enrollment number or timeline is guaranteed. Many providers find that their first year involves a slower enrollment ramp than they expected, so plan your budget with that in mind.

Resources

• California Secretary of State, Business Programs Division: https://www.sos.ca.gov/business-programs
• bizfile Online for entity filings: https://bizfileonline.sos.ca.gov/
• California Department of Tax and Fee Administration: https://www.cdtfa.ca.gov/
• Franchise Tax Board: https://www.ftb.ca.gov/
• Department of Social Services, for Community Care Licensing: https://www.cdss.ca.gov/
• California Small Business Development Center network, for free business advising: https://californiasbdc.org/

This article is informational only. It is not legal, tax or licensing advice. Requirements, fees and deadlines can change, so confirm each one with the agency named. Entity choice, lease terms and insurance decisions are complex, so talk to a qualified attorney and a CPA before you commit.