How Will Funding Changes Impact Child Care Providers and Professionals?
TDHS is proud to collaborate with child care providers to meet the needs of Tennessee families and is focused on offering these partners transparency as funding changes impact services:
Co-pays changed starting on October 1, 2025
Adjustments to co-pays and differentials for some child care subsidy payments went into effect on October 1, 2025. This information has been updated to current State Median Income (SMI) guidelines effective October 1, 2026. A list of those rates can be found by clicking here.
Some differentials were eliminated:
The TDHS Child Care Certificate Reimbursement Rates are structured to support affordable child care for families eligible and approved for Child Care Payment Assistance (Subsidy/Smart Steps) through the Child Care Certificate Program. Starting October 1, 2025, differentials were eliminated for toddlers and eliminated for participants living in child care deserts or distressed counties and non-traditional hour care. The 15 percent differential for children with disabilities and infants remains as it was prior to October 1, 2025. There have been additional adjustments to the QRIS bonus levels effective January 1, 2026. The current Reimbursement Rate Chart can be found by clicking here.
Families seeking to apply for Smart Steps may ask to be placed on a waitlist:
Families seeking to apply for Smart Steps after August 26, 2025 will be directed to the waitlist. Families interested in applying for child care payment assistance should visit the One DHS Customer Portal and follow instructions based on their family’s situation.
Resources for child care providers will be impacted by budget changes:
The availability of certain resources for child care providers and professionals changed based upon budgetary updates. A list of resources for providers are available on the TNPAL, Training and Professional Development Resources page. Child care professionals can and should continue to monitor options available from former TDHS partners as these community organizations may continue offering services based on their own mission and resources.