How to Start a Home Daycare in Michigan: Family Home (6) vs Group Home (12) Licenses

If you want to run child care out of your house in Michigan, the first decision is which license you need. The state splits home-based care into two levels: a family child care home for 1 to 6 children and a group child care home for 7 to 12 children. The two levels have different fees, different zoning rules and different paperwork. Picking the wrong level can cost you months, so settle it before you spend money on equipment or a lease.

This article is informational, not legal or tax advice. Fees, rules and local zoning change, and your address determines which zoning rules apply. Talk with a qualified attorney or CPA before you sign a lease, buy a property, or form a business entity.

Family Home or Group Home: The Quick Comparison

Both levels are licensed by the Child Care Licensing Bureau (CCLB) at the Michigan Department of Lifelong Education, Advancement, and Potential (MiLEAP), not by LARA. The table below covers the figures and rules this guide can confirm. Anything not listed should be confirmed with CCLB.

Item	Family child care home	Group child care home
Children cared for at one time	1 to 6	7 to 12
Original application fee	$50	$100
Renewal fee	$25	$50
Local zoning treatment	Must be treated as a permitted residential use in counties and townships	Needs a special use permit, which must be granted if the home meets the standards
Spacing from other homes	Not a listed requirement	1,500 feet from another group home or adult foster care group home
Fencing, 16-hour day and parking standards	Not a listed requirement	Apply to the special use permit
Capacity after 29 consecutive months (see Step 7)	7 children	14 children

The fee and capacity figures come from MCL 722.115m and MCL 722.111(2). The zoning standards come from MCL 125.3206. If you are still deciding between the two, the family home is the simpler path. A group home adds a zoning hurdle that many families never have to clear.

Understand What Michigan Does and Does Not License

Michigan has no general statewide business license. The Corporations Division at LARA receives, reviews and files the documents that form business entities. It does not license businesses. Registering an LLC or corporation through the MiBusiness Registry is a filing, not a license.

For a home daycare, your real license comes from CCLB. Your other approvals depend on your activity and your city, township or county. These can include local zoning, a certificate of occupancy and health approvals. Counties and municipalities may also require their own permits, so ask your local clerk or zoning office before you open.

Your business name and entity choice are separate from the child care license:

• Sole proprietor or general partnership: If you operate under a business name, file an assumed name certificate with the county clerk in each county where you do business, under MCL 445.1.
• LLC: File Articles of Organization (Form CSCL/CD-700) with LARA for a $50 filing fee. The yearly filing is the Annual Statement ($25), due February 15. An LLC formed after September 30 does not owe a statement on the February 15 immediately following.
• Sales tax: Retailers register with the Michigan Department of Treasury for a sales tax license. That registration is free. Whether you need it depends on what you sell, so confirm with Treasury.

Use the LARA Corporations Division page for entity filings and the MiLEAP child care page for licensing questions. Do not send your child care license application to LARA.

What You Need Before You Start

Gather these items before you contact CCLB. The application packet is the final word on what it requires, so confirm the current forms with the bureau.

• A decision on level: Family (1 to 6 children) or group (7 to 12 children). Write down the number you plan to care for at one time.
• The property address and ownership or lease terms: Your zoning answer depends on the exact parcel, not just the city or township name.
• A list of household members and staff: Background checks cover the licensee, household members and staff, so have full names, dates of birth and addresses ready for every adult who lives in the home or will work there.
• A floor plan and outdoor plan: For a group home, include fencing, parking and the space used for children. For a family home, show the rooms you will use for care.
• A written daily schedule: Group zoning applies a 16-hour day standard. Draft your hours now so they match the local ordinance.
• The fee: $50 for a family home or $100 for a group home at the original application, paid at filing.
• A start-up budget: Ask CCLB for current start-up costs. This guide does not list them, and you should not rely on any estimate that is not from the bureau.

Step-by-Step: Starting a Michigan Home Daycare

Step 1: Choose Your Level Based on the Children You Will Actually Serve

Pick the level that matches the number of children you plan to care for at one time. The license level sets your ceiling, so do not apply for six if you already know you need twelve. Consider your schedule, your household and how much outdoor space you have. If your plan could grow beyond six children, a group home is the level to plan for from the start, though it brings the zoning requirements described in Step 2.

Step 2: Confirm Zoning Before You Pay Anything

Zoning is where most group home plans fail, so check it first. Under MCL 125.3206:

• Family homes in counties and townships: The home must be treated as a permitted residential use.
• Group homes in counties and townships: You need a special use permit. The permit must be granted if your home meets the spacing standard, fencing, the 16-hour day standard and the parking standard.
• Spacing: A group home must be at least 1,500 feet from another group home or adult foster care group home. Ask your zoning office how it measures this distance, and ask CCLB whether it can help you confirm nearby licensed homes.
• Cities and villages: These may apply their own rules. Do not assume the county or township standards carry over.

Call the zoning office for your exact parcel and get the answer in writing if you can. A verbal yes from a front desk is not enough to sign a lease or buy a property.

Step 3: Ask CCLB for Current Rules and Start-Up Costs

Call or write to CCLB through the MiLEAP child care pages and ask three questions: what the current rules are for your level, what start-up costs you should expect, and what the application packet includes. Keep notes on the name of the person you spoke with and the date. Ask for the orientation schedule at the same time.

Step 4: Submit the Application and Pay the Fee

Submit the application with the original fee: $50 for a family home or $100 for a group home. Make sure every form is complete before you send it. The six-month decision clock starts only when the application is complete, so a missing signature or document delays the process without starting it.

Step 5: Complete the Department Orientation

Applicants complete a department orientation session. Attend it, take notes and ask about anything that is unclear about the on-site visit, background checks or record keeping. Staff who attend should understand the rules too, since they will be working under them.

Step 6: Clear Background Checks and Prepare for the On-Site Visit

Background checks cover the licensee, every household member and every staff member. Start this step as soon as you have names and dates of birth, since it can be the most sensitive part of the process for families with adult children or relatives living at home.

The department then makes an on-site visit. Walk through your home as an inspector would. Confirm that every room you plan to use is clean, safe and set up as your floor plan shows. For a group home, confirm that the fencing and parking match what you described to the zoning office.

Step 7: Wait for the Decision and Understand the 29-Month Rule

CCLB must issue or deny the license within six months of a complete application. Six months is the outer limit, not a promise of speed. Ask the bureau where your file stands if you have not heard back.

Once licensed, a home that has cared for an unrelated child, renewed its license and stayed licensed for 29 consecutive months becomes eligible for an increase of one child for a family home, to 7, or two children for a group home, to 14, under MCL 722.111(2). Eligibility is not the same as an automatic increase. Ask CCLB how to request the increase and what it needs from you.

Step 8: Set Up Renewals and Your Tax Filings

Renewal fees are $25 for a family home and $50 for a group home. Calendar your renewal date as soon as you receive the license, and keep the paperwork for each renewal in one place.

Your tax position depends on your entity. A standard LLC is a pass-through entity, so its members report the income on the Michigan individual income tax at the flat 4.25% rate for the 2026 tax year. An LLC that elects federal C corporation treatment is subject to the 6% Michigan Corporate Income Tax. Michigan does not impose a franchise tax, and the only recurring LARA charge for an LLC is the $25 Annual Statement. Only 24 Michigan cities levy a city income tax, so check whether yours is one. The Michigan Department of Treasury at michigan.gov/taxes is the place to confirm your filing obligations.

Common Mistakes to Avoid

• Looking for a LARA child care license. LARA files business entities. CCLB at MiLEAP issues the child care license.
• Assuming a family home approval covers a group home. The levels have different fees, zoning treatment and capacity rules.
• Signing a lease or buying a property before zoning is confirmed. A group home may fail the spacing or permit test on a parcel you already committed to.
• Missing the 1,500-foot spacing check. Confirm the distance to nearby group homes and adult foster care group homes before you apply.
• Forgetting household members in the background check. Every adult in the home is part of the process, not just the licensee.
• Treating the 29-month rule as automatic. You may become eligible for more children, but you still need to request the increase through CCLB.
• Using a P.O. box for an LLC's registered office. A resident agent's registered office must be a physical location, and a P.O. box alone is not sufficient.
• Missing the February 15 Annual Statement. An LLC that has passed its first year owes the $25 statement each year, and missing it creates an avoidable compliance problem.
• Assuming a county clerk filing is the same as a license. An assumed name certificate lets you use a business name. It does not authorize child care.

What Results to Expect

A license is the start of your business, not a guarantee of enrollment, income or growth. A clear plan for zoning, staffing and schedules may make the early months more manageable, but results depend on your local market, your rates, your reputation and how many children you can serve well.

Plan your timeline around the six-month decision window, which is the outer limit for CCLB to issue or deny a complete application. Keep your budget flexible until CCLB confirms the start-up costs and the license decision. If you hire staff, confirm their background check and training requirements with CCLB before they begin work.

Next Steps

Start with zoning. Call your city, township or county zoning office for your exact parcel, then confirm the level you want with CCLB through the MiLEAP child care page. If you plan to form an LLC or use a business name, file with LARA through the MiBusiness Registry after you have confirmed the rest. For free help with planning and financing, the Michigan Small Business Development Center can help you think through the business side.

Before you commit money, have a qualified attorney review any lease, zoning permit application or entity document, and have a CPA review your tax setup. This guide is informational only and is not legal or tax advice.