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Melissa Pearson owns and operates a cleaning business in Wheeling, West Virginia, where her team focuses on customer satisfaction while scrubbing and tidying homes and commercial properties.
A mom of two daughters, Pearson built Ready Set Clean from the ground up over the last year and a half. She relied on West Virginia's childcare assistance program to find and afford summer care while she worked.
But earlier this year, Pearson was forced to give up the needed financial help after being told that she couldn't operate an LLC, which provides legal protections for her business, and receive the childcare subsidy from the state.
"The business is doing pretty well. It's obviously not going well enough for me to, out of the blue, come up with $3,000 for an entire summer of childcare," said Pearson, 34.
Due to business growth, she was close to no longer needing help from the state paying for childcare.
"It prevents economic growth throughout the entire state when you hinder small businesses in this way," Pearson said. "You don't ever have the ability to work your way off of the system. ... The goal was always to get away from any kind of government assistance."
Families on average spend over $10,000 a year on childcare in West Virginia, making the state's childcare assistance a lifeline for parents and caregivers.
More than 11,000 West Virginia children are enrolled in the childcare subsidy program, which provides financial assistance to eligible parents who are employed or in school. West Virginia funds the program through federal anti-poverty dollars.
The state pays the subsidy amount to childcare centers across the state. Many centers have said receiving the subsidy dollars were critical in the poor state to keep doors open in the tumultuous childcare economy.
The childcare subsidy policy contains specific requirements for parents whose qualifying work activity is self-employment.
Department of Human Services spokesperson Angelica Hightower said that state policy requires that self-employment approvals for the childcare subsidy are limited to qualifying contracted or sole-proprietorship arrangements. Individuals who own a business, including an LLC or certain other types of corporations, are ineligible when that business ownership is used as the sole qualifying self-employment activity for the childcare subsidy.
"Individuals in these circumstances are not disqualified from eligibility, but would have to meet the qualifying activity requirement in another manner (additional employment, educational activities, etc.)," Hightower wrote in an email.
Childcare can be hard to come by in West Virginia. More than 28,000 children currently lack access to care because West Virginia providers don't have enough available slots.
Ashtin McCloud, 25, said she was forced to dissolve her LLC for her salon in Huntington or she would lose her state childcare assistance and care for her children. She began using the assistance program in 2025 while in cosmetology school to help locate and pay for childcare for her two toddlers while she finished school, then launched her career as a nail artist.
"I was being told that I needed to dissolve my LLC and open up a sole proprietorship instead," said McCloud, owner of A-List Artistry. "An LLC protects you in so many ways, and I'm being forced to change the way that my business plan was and stripping away basically my protection. If somebody wanted to walk into my salon and slip and fall and say that they broke a wrist and go to the hospital, they're not suing my business -- they're suing me."
McCloud didn't want to rely on the assistance but without it, she would lose her childcare. She paid nearly $400 to dissolve her LLC.
"The government claims that they want people to use them in a positive way and, you know, get the help that they need until they can get on their feet. But yet, when you're trying to get on your feet and you're doing all of the things the way that you're supposed to be doing it, you're actually getting punished ... I don't understand why I'm being punished for owning my own business," she said.
West Virginia's policy regarding an LLC and the childcare subsidy has been in place since around 2007 following recommendation by the Office of the Inspector General "to ensure program integrity and reduce potential fraud and misrepresentation in accessing program benefits," Hightower explained.
She noted that this is a separate policy from licensing requirements for childcare providers.
Hightower encouraged parents to reach out to their local Child Care Resource and Referral agency for more information on eligibility.
"A parent should not dissolve an LLC or change the legal structure of a business solely on the basis of informal advice without first speaking with the CCR&R, and when appropriate, obtaining independent tax or legal advice," Hightower said.
" ... Eligibility is determined based on the family's complete circumstances, including qualifying activity, household income, need for hildcare and required documentation," she added.
Pearson and her boyfriend, Ben Culler, spent months appealing the loss of the childcare subsidy, basing their appeal on federal regulations and state policies they felt backed up their case.
Those appeals were unsuccessful.
"Ultimately, if the government's goal is to save money, (then) save money by making a better policy and helping people advance their lives to get off of subsidy -- not force them to stay small," Culler said.