How to Start a Daycare in Indiana (2026)

Last updated: February 25, 2026

Starting a daycare in Indiana means working through one of the most heavily regulated small business categories in the state. Child care operations require state licensing through the Family and Social Services Administration (FSSA), specifically the Office of Early Childhood and Out-of-School Learning (OECOSL). You will need FBI fingerprint-based background checks, mandatory orientation and health/safety training, facility inspections from the State Fire Marshal, and liability insurance before you can care for your first child.

This guide covers every requirement, cost, and step to legally start and operate a daycare in Indiana in 2026, whether you are opening a licensed child care home or a full child care center. Indiana updated its staff-to-child ratios effective December 1, 2025 under SEA 463, and those current ratios are reflected here.

Daycare Requirements in Indiana at a Glance

Requirement	Agency	Cost	Timeline
Licensed Child Care Center	FSSA / OECOSL	~$450 initial license	3-6 months
Licensed Child Care Home	FSSA / OECOSL	~$450 initial license	3-6 months
License Renewal (every 2 years)	FSSA / OECOSL	~$270	Submit before expiration
LLC Formation (Articles of Organization)	INBiz (Secretary of State)	$95	3-5 business days
Federal EIN	IRS	Free	Immediate (online)
FBI Fingerprint Background Check	IdentoGo + ISP	~$40-$60/person	2-4 weeks
Sex Offender Registry & Child Protection Index	ISP / DCS	Included	Annual check required
Orientation Training (I-LEAD)	FSSA – I-LEAD System	Free-$50	Orientation 1 + 2 before opening
CPR / First Aid Certification	Certified training provider	~$40-$80/person	Within 90 days of hire
General Liability Insurance	Commercial insurer	$800-$4,000/year	Same day
Fire Inspection	Indiana State Fire Marshal	Varies	1-4 weeks
Zoning Approval	County/City Zoning Dept.	Varies	1-4 weeks
Workers’ Comp Insurance (1+ employees)	Commercial insurer	Varies	Same day

How to Start a Daycare in Indiana (Step by Step)

Step 1: Choose Your License Type and Form Your Indiana LLC

Indiana’s FSSA recognizes several categories of child care operations. The two main licensed types are:

• Licensed Child Care Home: Operated from the provider’s residence. Serves a smaller number of children with more flexible requirements. Initial license fee: ~$450.
• Licensed Child Care Center: Typically operates in a commercial location with larger capacity. Must meet more extensive facility, staffing, and director qualification requirements. Initial license fee: ~$450.

Indiana also has Unlicensed Registered Ministry programs (religious-affiliated) and LLEP (Licensed Large Family Child Care) options. This guide focuses on the two standard licensed pathways.

File your Articles of Organization online at INBiz.in.gov. Total cost: $95. Processing takes 3-5 business days. Your LLC name must be distinguishable from existing entities on file with the Indiana Secretary of State.

Apply for a free Employer Identification Number (EIN) at IRS.gov. You will receive it immediately when applying online. You need this to open a business bank account and hire employees.

Step 2: Complete Background Checks

Indiana requires comprehensive background screening for all child care workers, volunteers with unsupervised access, and household members (for home-based operations). The requirements are more extensive than many states:

• FBI fingerprint check: Completed through IdentoGo (Indiana’s designated fingerprint vendor). Cost: approximately $40-$60 per person. Must be renewed every 3 years.
• Indiana State Police (ISP) check: Criminal history check through the state database.
• Sex offender registry check: Required annually for all staff and volunteers.
• Child protection index check: DCS (Department of Child Services) check, also required annually.

Important: Background check results must be obtained before an individual has unsupervised access to children. Do not delay this step – fingerprint processing can take 2-4 weeks. Certain criminal convictions permanently disqualify individuals from working in child care.

Step 3: Complete Required Training

Orientation Training (I-LEAD)

All child care personnel must complete Indiana’s orientation training through the I-LEAD system (Indiana Learning Paths for Early Childhood and Out-of-School Time). This is a two-part process:

• Orientation 1: Overview of Indiana child care regulations, health and safety basics, and child development fundamentals.
• Orientation 2: Deeper training on program administration, curriculum planning, and compliance requirements.
• Cost: Free to ~$50 depending on the training format.

Health and Safety Training

All caregivers must complete training in 10 required health and safety topic areas, covering prevention and response to emergencies, handling and storage of hazardous materials, appropriate precautions for transporting children, and recognizing signs of child abuse and neglect.

CPR / First Aid Certification

CPR and First Aid certification is required for all child care personnel within 90 days of hire.

• Cost: ~$40-$80 per person
• Must include pediatric CPR – adult-only certifications do not qualify
• Renewal: Typically every 2 years, depending on certifying organization

Annual In-Service Training

After completing orientation, all child care personnel must complete 12 hours of in-service training annually to maintain their credentials. Training must be documented and available for review during inspections.

Director Qualifications

Child care center directors in Indiana must be at least 21 years old and hold a bachelor’s degree in early childhood education or a related field. Indiana offers multiple pathways to meet director qualifications, including combinations of education and experience. Caregivers must be at least 18 years old with a high school diploma or GED.

Step 4: Prepare Your Facility

Indiana has specific space and safety requirements for child care facilities. Ensure your location meets these standards before applying for your FSSA license:

Space Requirements

• Indoor space: Minimum 35 square feet per child (general), 50 square feet per child for infants
• Outdoor play area: Minimum 75 square feet per child, must be fenced

Safety and Equipment

• Age-appropriate furniture, cribs, and equipment
• Fenced outdoor play area with appropriate surfacing
• Working smoke detectors and fire extinguishers
• Childproofing (outlet covers, cabinet locks, safety gates as needed)
• Safe sleep environments for infants (firm mattress, no soft bedding)
• Secure storage for cleaning supplies, medications, and hazardous materials
• Separate diapering and food preparation areas

Step 5: Pass Fire Inspection and Apply for Your FSSA License

Before your license is issued, your facility must pass a fire inspection from the Indiana State Fire Marshal. Monthly fire drills are mandatory and must be documented.

Submit your license application to FSSA / OECOSL. You can begin the process at in.gov/fssa/carefinder or call (877) 511-1144 for assistance.

Required documentation includes:

• Completed license application
• Background check clearances for all personnel and household members
• Training certificates (Orientation 1 & 2, health/safety topics, CPR/First Aid)
• Fire inspection report from the State Fire Marshal
• Proof of liability insurance
• Zoning approval documentation
• Floor plan of the facility
• Director qualification documentation (for centers)

Timeline: The full licensing process typically takes 3-6 months from initial application to license issuance. Start your background checks and training early to avoid delays. Initial license fee is approximately $450, with renewal at approximately $270 every 2 years.

Step 6: Get Insurance and Open for Business

General Liability Insurance

Indiana requires daycare operators to carry general liability insurance. The industry standard for child care is $1,000,000 per occurrence / $2,000,000 aggregate.

• Home-based daycare: $800-$2,000/year
• Center-based daycare: $1,500-$4,000/year
• Important: Standard homeowner’s insurance does not cover business activities – you need a separate commercial policy or a specific child care endorsement

Vehicle Insurance

If you transport children as part of your daycare services, you must carry commercial vehicle insurance with appropriate coverage limits. All vehicles used for transporting children must meet Indiana safety requirements.

Workers’ Compensation Insurance

Indiana requires workers’ compensation insurance for businesses with 1 or more employees. This threshold is lower than many states, so virtually every daycare with hired staff must carry this coverage from day one.

Indiana Daycare Staff-to-Child Ratios (Updated December 2025)

Indiana updated its staff-to-child ratios effective December 1, 2025 under SEA 463. These ratios must be maintained at all times, including during outdoor play, field trips, and transitions:

Age Group	Staff-to-Child Ratio	Maximum Group Size
Infants (0-12 months)	1:4	8
Toddlers (12-24 months)	1:5	10
2 years	1:5	10
2.5-3 years	1:7	14
3 years	1:10	20
4 years	1:12	24
5 years / Kindergarten	1:15	30
School-age (6+)	1:20	40
Mixed infant/toddler (6 weeks – 36 months)	1:5	12

Mixed age groups: When children of different ages are in the same group, the ratio and group size for the youngest child in the group applies. The mixed infant/toddler category (6 weeks – 36 months) has its own specific ratio of 1:5 with a maximum group size of 12.

Cost to Start a Daycare in Indiana

Home-Based Licensed Child Care Home

Item	Cost	Notes
LLC Formation (INBiz)	$95	One-time
Federal EIN	Free	Online at IRS.gov
FSSA License (initial)	~$450	Renewal ~$270 every 2 years
FBI Fingerprint Background Check	$40-$60/person	All personnel + household members
Orientation Training (I-LEAD)	Free-$50	Orientation 1 + 2
CPR / First Aid Certification	$40-$80	Pediatric-specific required
General Liability Insurance	$800-$2,000/year	$1M/$2M recommended
Workers’ Comp Insurance	Varies	Required at 1+ employees
Facility Prep (childproofing, equipment, supplies)	$2,000-$10,000	Varies widely
Marketing / Website / Signage	$200-$1,000	Optional at start
Estimated total: $4,000-$15,000

Center-Based Licensed Child Care Center (25-75 Children)

Item	Cost	Notes
LLC Formation (INBiz) + EIN	$95	One-time
FSSA License (initial)	~$450	Renewal ~$270 every 2 years
FBI Fingerprint Background Checks (all staff)	$200-$600+	$40-$60/person, 5-10+ staff
Orientation Training + Health/Safety (all staff)	$250-$500+	Per staff member
CPR / First Aid (all staff)	$200-$800+	Per staff member
Fire Inspection	Varies	State Fire Marshal
Zoning Approval	$50-$300	Varies by municipality
General Liability Insurance	$1,500-$4,000/year	$1M/$2M recommended
Workers’ Comp Insurance	Varies	Required at 1+ employees
Lease Deposit + Build-Out	$5,000-$35,000+	Location dependent
Furniture, Equipment & Supplies	$5,000-$25,000	Cribs, tables, play equipment, etc.
Outdoor Play Area (fencing, surfacing, equipment)	$3,000-$15,000	Must meet 75 sq ft/child, fenced
Marketing / Website / Signage	$500-$3,000	Professional presence
Estimated total: $20,000-$90,000+

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Frequently Asked Questions

What license do I need to open a daycare in Indiana?

You need a license from the Indiana Family and Social Services Administration (FSSA), specifically the Office of Early Childhood and Out-of-School Learning (OECOSL). The two main license types are a Licensed Child Care Home (operated from your residence) and a Licensed Child Care Center (commercial location). Both require an initial license fee of approximately $450, with renewal at approximately $270 every 2 years. Start the process at in.gov/fssa/carefinder or call (877) 511-1144.

What are Indiana’s daycare staff-to-child ratios?

Indiana updated its ratios effective December 1, 2025 under SEA 463. Current ratios by age group are: Infants (0-12 months): 1:4 (max group 8), Toddlers (12-24 months): 1:5 (max 10), 2 years: 1:5 (max 10), 2.5-3 years: 1:7 (max 14), 3 years: 1:10 (max 20), 4 years: 1:12 (max 24), 5 years/Kindergarten: 1:15 (max 30), and School-age: 1:20 (max 40). For mixed infant/toddler groups (6 weeks – 36 months), the ratio is 1:5 with a maximum group size of 12.

What background checks are required for Indiana daycare workers?

Indiana requires four types of background checks: an FBI fingerprint check through IdentoGo, an Indiana State Police (ISP) criminal history check, a sex offender registry check (required annually), and a child protection index check through DCS (also required annually). Fingerprints must be renewed every 3 years. All checks must clear before an individual has unsupervised access to children.

What training is required to run a daycare in Indiana?

All child care personnel must complete Orientation 1 and Orientation 2 through the I-LEAD system, plus training in 10 required health and safety topic areas. CPR and First Aid certification is required within 90 days of hire. After the initial orientation, all staff must complete 12 hours of annual in-service training. Center directors must be at least 21 years old with a bachelor’s degree in early childhood education or a related field (multiple pathways available). Caregivers must be at least 18 with a high school diploma or GED.

How much does it cost to start a daycare in Indiana?

A home-based licensed child care home typically costs $4,000-$15,000 to start, including FSSA licensing (~$450), background checks, training, insurance, and basic facility preparation. A center-based child care facility (25-75 children) typically costs $20,000-$90,000+ due to lease costs, build-out, commercial equipment, fenced outdoor play area, and staffing multiple employees. Indiana’s LLC formation fee is $95 through INBiz.

Does Indiana require workers’ compensation for daycare businesses?

Yes. Indiana requires workers’ compensation insurance for businesses with 1 or more employees, which is a lower threshold than many states. This means virtually every daycare that hires any staff must carry workers’ compensation from day one. Failure to maintain coverage can result in fines and loss of your child care license.