Tennessee Daycare Licensing Requirements: Operating and Expanding a Licensed Child Care Center

In Tennessee, child care centers are licensed by the Tennessee Department of Human Services (TDHS), Division of Child Care and Community Services, under rules 1240-04-01, 1240-04-05, and 1240-04-07.

Licensing has not moved to the Department of Education: a 2025 consolidation bill (HB1238 / SB1378) that would have moved it to the Tennessee Department of Education (TDOE) did not become law.

This guide is for operators running or expanding a licensed center — license types, fees, timelines, staff qualifications, background checks, inspections, and the financial records that keep your license current.

Note: This article is for operators of licensed child care centers. Family child care homes (five to seven unrelated children; 1240-04-01-.02(23), eff. 2026-02-08) and group child care homes are separate, lower-capacity classes TDHS also licenses — direct questions about them to TDHS. The information below is for educational purposes and does not constitute legal advice.

Tennessee Child Care Licensing At-a-Glance

Data last verified: August 26, 2026

Governing Law and the DHS/TDOE Boundary

Child care agency licensing in Tennessee is authorized under T.C.A. §§ 71-3-501 et seq., which DHS implements through three active rule chapters (dated in the table above): 1240-04-01 (Licensure Rules), 1240-04-05 (Procedures), and 1240-04-07 (Quality Rating and Improvement System).

Separately, under T.C.A. § 49-1-302 and rule chapter 0520-12-01 (revised February 2024), the Tennessee Department of Education licenses school-administered and church-related-school programs (the latter defined by § 49-50-801) and monitors state-approved Montessori and school-administered Head Start programs. Being subject to TDOE regulation does not route those programs to TDHS: under T.C.A. § 71-3-503(b)(2), a school-administered Head Start program and all state-approved Montessori programs “that are subject to regulation by the department of education” are exempt from DHS licensure. So TDHS licenses your center only if it falls into neither the school-administered or church-related categories TDOE licenses nor a TDOE-regulated category that § 71-3-503 exempts.

License Types, Thresholds, and Exemptions

Under 1240-04-05-.02(3) (eff. 2025-11-20) and T.C.A. § 71-3-503(b) (amended eff. July 1, 2025), a program caring for five (5) or more unrelated children three (3) or more hours per day must be licensed unless statutorily exempt. Operating without a license, absent license-exempt status, is a Class A misdemeanor (TDHS How to Become a Licensed Child Care Provider, as of 2026-08-26).

This page covers the two center classes under 1240-04-01-.02 (eff. 2026-02-08):

• Child Care Center: care for at least thirteen (13) children not related to the primary educator, for three (3) or more hours per day.
• Drop-In Child Care Center: care for fifteen (15) or more unrelated children at the same time for short periods, not to exceed fourteen (14) hours per week and not more than seven (7) hours per day for any individual child during regular working hours (Monday–Friday, 6:00 a.m. to 6:00 p.m.). Evenings and weekends are permitted so long as the total does not exceed twenty (20) hours per week, exclusive of snow days.

Exemptions from Licensure

An operating licensed center is not itself exempt, but an existing licensee might add two programs exempt under T.C.A. § 71-3-503 (amended effective July 1, 2025): when run by a religious institution, a “Parents’ Day Out” program under § 71-3-503(b)(6) (no child attending more than twelve hours per calendar week, registered with written approval); and a separate “Parents’ Night Out” / special-event program under (b)(7) (capped at fourteen days per year; a licensed agency must notify TDHS, obtain written approval first, and may not run one during its licensed hours). Exemptions apply only “upon demonstration by clear and convincing evidence” to TDHS, and most require registration and written approval before operating; confirm any exemption with TDHS or qualified legal counsel.

Restricted Licenses and Special Notations

Under 1240-04-01-.02(42) (eff. 2026-02-08), TDHS may issue a restricted license reducing an agency’s operational authority on a finding of non-compliance or risk to child safety. Under 1240-04-05-.03(9) (eff. 2025-11-20), a center must obtain a specific notation to offer before- or after-school services; operating them without it is prohibited.

Licensing Costs and Fees

Tennessee charges flat initial application fees by capacity band. No renewal, annual, relocation, or capacity-change fees appear in the rules — the only fee provision, 1240-04-05-.03(14) (eff. 2025-11-20), is captioned for initial licenses, and a license cannot be relocated (1240-04-01-.04(1)(d), eff. 2026-02-08).

Initial Application Fee Schedule (Rule 1240-04-05-.03(14), effective November 20, 2025)

• Child Care Center (Less than 100 children): $200.00
• Child Care Center (More than 100 children): $400.00
• Child Care Center (More than 250 children): $500.00
• Drop-In Center: $200.00

(The same rule sets $100.00 for family child care homes and $125.00 for group child care homes — the separate home-provider classes noted above.)

Note on capacity bands: the rule’s wording (“Less than 100” / “More than 100”) leaves exactly 100 and exactly 250 children outside the defined bands; operators at those exact edges should confirm their fee tier with TDHS.

Other Operational Costs

• Background Checks: Under 1240-04-01-.07(2) (eff. 2026-02-08), TDHS pays for one background check per person, per child care agency, per year. The agency pays if a fingerprint sample is rejected and resubmitted, if a second sample is submitted for the same person within 30 days, or if the sample is for a non-resident or someone not selected for a position.
• Inspections and clearances: Before a provisional license issues, TDHS requests State Fire, Environmental, and Choose Safe Places reviews, and the provider obtains a clearance letter from local Codes and Zoning (DHS Procedures step 7, as of 2026-08-26). No county or municipal child care licensing authority appears in the rules, but these clearances are required; their fees are not published by DHS and vary by jurisdiction.
• Liability Insurance: Centers and drop-in centers must carry liability insurance (1240-04-01-.05, eff. 2026-02-08); “Lack of Insurance” is an enumerated civil-penalty category (a $200/$300/$400 escalating penalty under 1240-04-05-.04(3)(b), eff. 2025-11-20).
• General Compliance: Under 1240-04-05-.03(2) (eff. 2025-11-20), all costs of meeting licensing standards fall entirely on the applicant or licensee.

The Licensing Timeline and the 120-Day Provisional Window

Tennessee publishes no processing-time commitment, but its published Procedures (TDHS Procedures for Becoming a Licensed Child Care Agency, as of 2026-08-26) set out these stages, keeping TDHS’s step numbers: contact the Pre-Licensure Unit (Step 1, ChildcarePreLicensure.DHS@tn.gov); register on the TN e-Licensing Portal and attend an Orientation/Intake Session (Steps 3–4); begin the Small Business Academy (Step 5); a Program Specialist measures capacity on-site, and TDHS then requests the State Fire, Environmental, and Choose Safe Places reviews (Step 7); once clearances and inspections clear, the Specialist requests the application fee (Step 8); and complete a first walk-through with the Program Specialist, then a second with the Program Specialist, Licensing Consultant, and Financial Specialist (Steps 9–10).

The 120-Day Provisional License

Once approved, TDHS issues a provisional license for one hundred twenty (120) days under 1240-04-01-.02(40) (eff. 2026-02-08).

• Purpose: The provisional license lets you open, enroll children, and demonstrate you can maintain compliance (1240-04-05-.03(5)(c), eff. 2025-11-20). It is not an application processing wait-time.
• Extension: If TDHS fails to issue or deny a license within 120 days of granting the provisional, the provisional remains in effect, unless suspended, until a determination is made (1240-04-05-.03(11)(a), eff. 2025-11-20). TDHS may also extend the provisional period if more time is needed to demonstrate compliance (1240-04-01-.02(40), eff. 2026-02-08).
• Conversion: To convert to a Continuous License, the center must complete the provisional period — including four (4) satisfactory in-person monitoring visits from TDHS — and demonstrate compliance with all laws and regulations governing its classification (1240-04-01-.04(1)(b), eff. 2026-02-08).

Staff Qualifications and Training

Under 1240-04-01-.06(6)(a) (eff. 2026-02-08), a Child Care Center Director must be at least 21 years old and meet one of four educational and experience pathways:

• an accredited 4-year college degree, or a registered nurse with less than a 4-year degree plus 1 year of full-time experience with children in a group setting; or
• 36 hours of coursework (at least 30 in business management, child or youth development, early childhood education, or a closely related field) or a TN Early Childhood Administrator Credential, plus 2 years of full-time group experience; or
• a High School diploma (or state-recognized equivalent) and the Tennessee Early Childhood Training Alliance Certificate for 30 clock hours of Administrator Orientation training (or the Department-recognized equivalent) plus 4 years of full-time group experience; or
• continuous employment as an on-site child care director or child care agency owner as of the effective date of these rules.

Other Staff Roles

Under the same rule (1240-04-01-.06(6)(a), eff. 2026-02-08):

• Assistant Director: Minimum age 18; High School diploma/equivalent and 2 years of experience.
• Educator: Minimum age 18; High School diploma/equivalent required only if they are the sole educator for a group or needed to meet group requirements.
• Student Assistant: Minimum age 16; must be currently enrolled in a technical child care educational program.

Training Requirements

Before having contact with children, a director must complete orientation training covering 14 topics, Shaken Baby/Abusive Head Trauma training, and federal pre-service training (1240-04-01-.06(3)(f)-(g), eff. 2026-02-08).

Annual training hours are mandated by role under 1240-04-01-.06(6)(c) (eff. 2026-02-08):

• Single-Site Director: At least 24 hours annually (including 6 or more hours of health/safety and 3 or more hours of pre-literacy/literacy).
• Assistant Director: At least 18 hours annually.
• Educator: 12 total hours annually.

Substitutes and practicum students who provide more than 36 hours of service in a calendar year must clear background checks before starting and meet the same physical-examination requirement as regular staff (1240-04-01-.06(4), eff. 2026-02-08); non-qualifying substitutes and practicum students may never be left alone with children. Volunteers may not count toward adult:child ratios and may never be left alone with children, except that parents or guardians may be counted in the ratio at a field-trip location (1240-04-01-.06(5)(a), eff. 2026-02-08).

Background Check Requirements

Under 1240-04-01-.07 (eff. 2026-02-08), background checks are required for anyone who owns or operates the agency; anyone who applies to work as an employee, director, or manager; any substitute over 36 hours of service in a calendar year counted in the adult:child ratio; and any person aged fifteen (15) or older who will reside in the agency.

• Timing: Checks must be completed no more than ninety (90) days before the individual has access to any child care agency (1240-04-01-.07(1)(a), eff. 2026-02-08).
• Recheck Interval: Background checks must be re-run at least every five (5) years (1240-04-01-.07(1)(c), eff. 2026-02-08).
• Break in Service: A new check is required if a staff member is separated from child care employment in Tennessee for more than 180 consecutive days (1240-04-01-.07(1)(b), eff. 2026-02-08).
• Provisional Work Rule: No person may be employed by, be a licensee or operator of, provide substitute services to, or have unsupervised contact with children at a child care agency before the criminal history review completes, documented by either a Final Clearance Letter or a Conditional Letter allowing work under another fully cleared applicant’s supervision until all out-of-state results issue (1240-04-01-.07(2)(c), eff. 2026-02-08).
• Turnaround: Tennessee publishes no background-check turnaround time of its own; the federal 45-day cap at 45 CFR 98.43(e)(1) binds the state (ch. 1240-04-01, eff. 2026-02-08; as of 2026-08-26).
• Disqualifying Offenses: Convictions, guilty pleas, or pending warrants/indictments for crimes of violence, drug offenses, child abuse, or any offense presenting a threat to children disqualify an applicant; an unresolved charge is itself an exclusion (1240-04-01-.07(3), eff. 2026-02-08).

Ratios, Group Size, and Usable Space

Ratios and the 10% Variance

We cover Tennessee’s exact age-group ratios and maximum group sizes in our Tennessee Child Care Ratios Guide, established under 1240-04-01-.22(1)(c), Chart 1 and Chart 2 (eff. 2026-02-08).

Note the 10% variance rule under 1240-04-01-.22(1) (eff. 2026-02-08): centers may exceed ratio and group-size requirements by up to 10% (rounded to the nearest whole number) no more than three days per week — but never for infant and toddler groups, never above licensed capacity, and terminable by TDHS under a restricted license. Ratios double during field trips, and a second adult must be available on the premises whenever more than 12 children are present.

Physical Space Requirements (Rule 1240-04-01-.22(2) & .16(9)(a), eff. 2026-02-08)

• Usable Indoor Space: A minimum of 30 square feet of usable indoor play space per child in each classroom (restrooms, halls, and kitchen do not count).
• Nap Rooms: A minimum of 30 square feet of floor space per child.
• Outdoor Play Space: A minimum of 50 square feet of usable play space per child using the area at any one time. The outdoor area must be enclosed by a fence or barrier at least 4 feet in height, waivable only on “a clear showing that the lack of such fence or barrier poses no apparent or potential risk to children.”

Inspections and Routine Monitoring

TDHS must inspect facilities at regular intervals without previous notice (1240-04-05-.04(1)(a), eff. 2025-11-20). Centers with a Continuous License receive a minimum of four (4) monitoring visits per year — for programs that close for the summer, three quarterly visits plus one just before or after that closure (1240-04-07-.03(4)(a)-(b), eff. 2025-11-20). The two-announced/two-unannounced split and the operational details below are TDHS published policy (TDHS Provider Monitoring and Inspections, as of 2026-08-26):

• The Split: Two (2) visits are announced, and two (2) are unannounced, scheduled in random order.
• What is Evaluated: During unannounced visits, consultants review 11 critical high-risk items and check for safety hazards; corrective action plans are completed on the spot where violations are found, and major violations require follow-up within five days.
• Safety Plans: On an active Safety Plan, TDHS conducts weekly unannounced visits until it is lifted.
• Parental Access: Under 1240-04-05-.04(1)(d)-(e) (eff. 2025-11-20), parents may visit and inspect the facility at any time their child is in care; any violation of that right is a Class A misdemeanor.

Continuous Licensing and the “Renewal” Myth

Tennessee utilizes a Continuous License model (1240-04-01-.02(16), eff. 2026-02-08); despite claims on some commercial and ranking pages, there is no three-year renewal cycle. Once your provisional period is successfully completed, your license carries no fixed expiration date. Under 1240-04-01-.04(1)(c) (eff. 2026-02-08) you maintain it continuously by demonstrating compliance history throughout the licensing period, payment in full of all assessed civil penalties and other monies owed the state, and submission of required documentation (including required annual inspections, as determined by the Department). If a TDHS communication refers to a license “renewal,” confirm your status through the TN e-Licensing Portal or your licensing consultant.

Violations, Penalties, and Enforcement

A licensee facing a civil penalty, probation, suspension, or revocation should consult qualified legal counsel; the material below states the rules and deadlines, not a course of action.

Civil Penalty Schedule (Rule 1240-04-05-.04(3), effective November 20, 2025)

TDHS may assess a civil penalty for each separate violation, ranging from $50.00 for minor violations up to a maximum of $1,000.00 for major violations or violations resulting in death or injury to a child. Each day a violation continues counts as a separate violation.

Probation, Suspension, and Revocation

• Probation: An agency on probation must immediately post the notice conspicuously as directed and notify the parent/guardian of each child in its care of the status, basis, and right to an informal review. It may submit material within five (5) business days, with a decision within seven (7) business days of imposition; a further written appeal to the Commissioner is due within five (5) business days, and if timely, an administrative hearing is held within fifteen (15) business days of receipt (1240-04-05-.04(2), eff. 2025-11-20).
• Denial or Revocation: If TDHS moves to deny or revoke a license, the operator has ten (10) days from personal delivery or mailing of the notice to appeal in writing to the Child Care Agency Board of Review; failure to appeal within 10 days results in immediate license expiration (1240-04-05-.04(4), eff. 2025-11-20).
• Civil-Penalty Appeal: A civil penalty may be appealed by written request to the Commissioner within ten (10) days of personal service or the order’s mailing date; the appeal is heard within ninety (90) days unless continued for good cause (1240-04-05-.04(3)(e)-(f), eff. 2025-11-20).
• Summary Suspension: TDHS may summarily suspend a license if it determines that the health, safety, or welfare of the children in care imperatively requires emergency action and incorporates a finding to that effect in its order (1240-04-05-.04(5)(a), eff. 2025-11-20).
• Reapplication Bars: After one denial or revocation, no reapplication for one (1) year; after a second, two (2) years; after a third, the agency “shall not receive another license for the care of children.” Waivers of the one- and two-year bars may be sought from the Board of Review or the Commissioner, but not of the permanent bar. Separately, a person who served as a full or part owner, director, or member of management and participated in that capacity in a child care agency denied a license or having a license revoked on three (3) occasions may not receive a license to operate a child care agency (1240-04-05-.06, eff. 2025-11-20).

Adding a Second Site, Relocating, or Selling

Because a Tennessee child care license is tied to a specific physical address and legal entity, licenses are strictly non-transferable under 1240-04-01-.04(1)(d) (eff. 2026-02-08).

• Relocating or Adding a Site: A license is not transferable to a new address (1240-04-01-.04(1)(d), eff. 2026-02-08), so relocating or opening a second location requires a completely new application, a new application fee ($200.00 to $500.00; 1240-04-05-.03(14), eff. 2025-11-20), new inspections, and a new 120-day provisional period.
• Selling Your Center: A transfer by sale, lease, or otherwise voids the license immediately and the agency must close; if the transferee has applied for and been granted a provisional license, the agency may continue under the new licensee’s direction (1240-04-05-.03(13)(a), eff. 2025-11-20). The new licensee may not be the seller or anyone acting on the seller’s behalf.
• Notice Requirements: Under 1240-04-05-.03(13)(b) (eff. 2025-11-20), at least thirty (30) days before any sale, lease, or other transfer, the licensee must notify the prospective transferee in writing that the license is not transferable, that it will automatically terminate on the transfer date, and of the need to seek a provisional license, and must notify TDHS in writing at the same time with the transfer date and the transferee’s identity.
• Your Compliance History Follows You: A prior compliance record does not reset at a new site. An operator’s history of prior violations is an express factor in setting civil penalties (1240-04-05-.04(3)(b)1, eff. 2025-11-20), and the three-occasion bar on receiving another license attaches to any person who served as a full or part owner, director, or member of management (1240-04-05-.06(4), eff. 2025-11-20), following that person to a new agency. Route any second site or acquisition that touches a prior enforcement history to TDHS and qualified counsel.

The Quality Rating and Improvement System (QRIS)

Tennessee’s legacy “Star Quality” star-rating rules were repealed effective June 29, 2022 (1240-04-07-.05 to .07) and replaced by a 100-point Quality Rating and Improvement System (QRIS) scorecard under 1240-04-07 (eff. 2025-11-20).

• The Score: Two components — Health and Safety (60 points) and Teacher/Child Interactions — totaling 100 (1240-04-07-.03(3), (5)-(6), eff. 2025-11-20). TDHS averages your four quarterly monitoring-visit scores into one annual score (1240-04-07-.03(6), eff. 2025-11-20) and deducts points for violations found (including between visits) or incomplete staff training (1240-04-07-.03(8), eff. 2025-11-20).
• Financial Impact: Under 1240-04-07-.04 (eff. 2025-11-20), centers contracting into the Child Care Certificate Program that score 80–89 or 90–100 receive the base rate plus a bonus payment, at the department’s discretion based on budgetary considerations, and with no fixed percentage set by rule.

Your official QRIS scorecard must be posted directly next to your license in a conspicuous area (1240-04-07-.03(7), eff. 2025-11-20).

The Financial Compliance Layer

Beyond child safety, TDHS rules establish financial record-keeping mandates that make your back-office books a licensing artifact:

1. The Pre-Licensure Budget: Under 1240-04-01-.05(2)(a) (eff. 2026-02-08), applicants must submit a proposed budget demonstrating adequate funding for preliminary and ongoing operations.
2. Immediate Availability: Under 1240-04-01-.05(2)(b) (eff. 2026-02-08), all relevant financial records of the child care agency must be “immediately available to the Department upon request.”
3. Subsidy Auditing: If your center accepts state certificate program payments or food program subsidies, you must produce these records immediately on request to any auditing or licensing authority (1240-04-01-.05(3), eff. 2026-02-08).
4. Penalty Blocks: Under 1240-04-01-.04(1)(c) (eff. 2026-02-08), maintaining your Continuous License requires payment in full of all assessed civil penalties and other monies owed the state; failure to meet the maintenance requirements may result in denial of the continuation of the license (1240-04-01-.04(1)(e), eff. 2026-02-08).

For an expanding operator these recur — the four monitoring visits a year, the 24/18/12 annual training hours by role, the five-yearly background-check re-run for every staff member, the CPR and first-aid clocks on every hire (1240-04-01-.06(6)(b), eff. 2026-02-08), and a second site that restarts the pre-licensure cycle — each leaving a records-and-reporting trail.

Tactivus provides managed finance and runs the finance function for preschool and daycare operators, taking on that recurring records-and-reporting burden. It is not licensing consulting, and Tactivus does not advise on licensing compliance.

Contact Tactivus to learn how we support your center’s financial operations.

Sources

• Tennessee Department of Human Services (TDHS) Rules: Chapters 1240-04-01 (eff. Feb. 8, 2026), 1240-04-05 (eff. Nov. 20, 2025), and 1240-04-07 (eff. Nov. 20, 2025), with the chapter index at the Tennessee Secretary of State Official Compilation.
• Tennessee Department of Education (TDOE) Rules: Chapter 0520-12-01 (Revised Feb. 2024).
• Tennessee Code Annotated (T.C.A.): §§ 71-3-501 et seq. (enabling statute) and § 71-3-503, “Programs and facilities exempt from licensing” (amended effective July 1, 2025).
• TDHS Child Care Services provider pages (threshold and exemptions, provider monitoring and inspections, QRIS): tn.gov/humanservices.