Best States for Child Care Home, Familys to Start a Home Business
We ranked all 51 states based on licensing requirements, earning potential, LLC costs, and tax burden. Here are the best (and worst) states for child care home, familys.
7 states don't require a license · National median: N/A · Updated 2025
▲ Top 5 Best States
Full Ranking: All 51 States
| # | State | License | Fee | Median Wage | LLC Cost | Score |
|---|---|---|---|---|---|---|
| 1 | Arizona | No | — | $16.89/hr | $50 | 91 |
| 2 | Colorado | Yes | $100 | $18.47/hr | $50 | 83 |
| 3 | Iowa | No | — | $13.43/hr | $50 | 83 |
| 4 | Vermont | Yes | $20 | $18.19/hr | $125 | 80 |
| 5 | Idaho | No | — | $14.00/hr | $100 | 79 |
| 6 | New Jersey | No | — | $16.49/hr | $125 | 78 |
| 7 | Hawaii | Yes | $22 | $17.52/hr | $51 | 77 |
| 8 | New Hampshire | Yes | $43 | $16.62/hr | $100 | 77 |
| 9 | New Mexico | Yes | $59 | $16.46/hr | $50 | 76 |
| 10 | South Carolina | No | — | $13.67/hr | $110 | 75 |
| 11 | South Dakota | No | — | $12.92/hr | $150 | 75 |
| 12 | Washington | Yes | $12 | $18.18/hr | $200 | 75 |
| 13 | California | Yes | $284 | $18.38/hr | $70 | 74 |
| 14 | Alaska | Yes | $40 | $16.82/hr | $250 | 73 |
| 15 | Illinois | Yes | $28 | $15.80/hr | $150 | 73 |
| 16 | Kentucky | Yes | $40 | $13.73/hr | $40 | 73 |
| 17 | Michigan | Yes | $50 | $14.08/hr | $50 | 73 |
| 18 | Missouri | Yes | $41 | $14.33/hr | $50 | 73 |
| 19 | New York | Yes | $25 | $17.61/hr | $200 | 73 |
| 20 | Maryland | Yes | $51 | $16.90/hr | $100 | 72 |
| 21 | Oregon | Yes | $87 | $17.43/hr | $100 | 72 |
| 22 | Louisiana | No | — | $10.63/hr | $100 | 71 |
| 23 | Montana | Yes | — | $15.11/hr | $35 | 71 |
| 24 | Massachusetts | Yes | $135 | $18.89/hr | $500 | 70 |
| 25 | Georgia | Yes | $50 | $13.44/hr | $100 | 69 |
| 26 | Indiana | Yes | $39 | $14.11/hr | $100 | 69 |
| 27 | Connecticut | Yes | $40 | $16.97/hr | $120 | 68 |
| 28 | Minnesota | Yes | $90 | $16.16/hr | $155 | 68 |
| 29 | Rhode Island | Yes | $110 | $16.79/hr | $150 | 68 |
| 30 | North Dakota | Yes | $20 | $14.61/hr | $135 | 65 |
| 31 | District of Columbia | Yes | $300 | $21.83/hr | $99 | 64 |
| 32 | Oklahoma | Yes | $64 | $12.60/hr | $100 | 64 |
| 33 | Virginia | Yes | $83 | $14.49/hr | $100 | 64 |
| 34 | Maine | Yes | $160 | $16.69/hr | $175 | 63 |
| 35 | Delaware | Yes | $65 | $14.45/hr | $110 | 60 |
| 36 | Florida | Yes | $87 | $14.85/hr | $125 | 60 |
| 37 | Kansas | Yes | $85 | $13.84/hr | $165 | 60 |
| 38 | Nebraska | Yes | $95 | $13.88/hr | $110 | 60 |
| 39 | Pennsylvania | Yes | $58 | $13.62/hr | $125 | 60 |
| 40 | Tennessee | Yes | $5 | $13.96/hr | $300 | 60 |
| 41 | Wisconsin | Yes | $99 | $14.27/hr | $130 | 60 |
| 42 | Wyoming | Yes | $89 | $13.25/hr | $102 | 60 |
| 43 | Ohio | Yes | $250 | $13.57/hr | $99 | 59 |
| 44 | Utah | Yes | — | $14.84/hr | $54 | 59 |
| 45 | Arkansas | Yes | $176 | $13.07/hr | $50 | 58 |
| 46 | Alabama | Yes | $47 | $10.78/hr | $200 | 57 |
| 47 | West Virginia | Yes | $54 | $11.48/hr | $100 | 56 |
| 48 | Mississippi | Yes | $190 | $10.46/hr | $50 | 55 |
| 49 | North Carolina | Yes | $153 | $13.69/hr | $125 | 55 |
| 50 | Texas | Yes | $111 | $13.71/hr | $300 | 55 |
| 51 | Nevada | Yes | $481 | $14.01/hr | $425 | 45 |
▼ 5 Most Challenging States
Nevada
Fee: $481$14.01/hr45
Texas
Fee: $111$13.71/hr55
North Carolina
Fee: $153$13.69/hr55
Mississippi
Fee: $190$10.46/hr55
West Virginia
Fee: $54$11.48/hr56
How We Scored Each State
Each state starts with a base score of 50, then we add or subtract points based on:
- No license required: +20 points (biggest single factor — lower barriers to entry)
- License fee: −10 for fees over $500, −5 for over $300, +10 for under $50
- Wages above national median: Up to +15 points for states paying 20%+ above national median
- LLC formation cost: +8 for states under $50, −5 for states over $300
- No sales tax on services: +5 points
Data sources: Institute for Justice License to Work 3 (licensing), BLS OEWS May 2024 (wages), state Secretary of State offices (LLC costs). This ranking reflects factors relevant to home-based operators — commercial location costs, local zoning, and cost of living are not included.
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