How much will my daycare get from the childcare stabilization grant? 32% of employers have seen some of their employees leave the workforce due to the effects of COVID-19. Is the grant taxable income? 4 0 obj
A: No. No. Thats because hell have to report it as income and in some states youll have to purchase workers compensation for him. Q: How can I build up my Social Security benefits before I retire when my profit has not been very high? Should I pay myself first with the grant money and then make payments on the vehicle? The amount your reduced tuition would have no impact on your taxes. One extra snack per day, per child is an additional $202 deduction. 2. In other words, lets say you paid yourself $5,000 and used $2,000 for items used 100% for your business. No. A: You cannot deduct any costs associated with a dog or cat. Virginia's Child Care Stabilization Grant Program is designed to: Stabilize child care programs now; Support providers to make strategic investments in their programs; Target higher rates of support to providers located in or serving communities hit hardest by the pandemic; and Encourage participation in the Child Care Subsidy Program. The application process is straightforward and designed to deliver grant funds directly to Oklahoma child care programs. Is the Child Care Program Stabilization Funding taxable? Find Stabilization Grant Applications for your State or Territory. Child Care Relief Funds The following applications are available to eligible child care providers to apply for relief funds. Child Care Stabilization Grants The American Rescue Plan Act of 2021 (ARP Act) (Pub. If you do so, this will help support the work I do helping family child care providers be more successful as a business. You want to claim this large deduction. Q: Is a new roof a major or minor repair? Here are the government resources for the Child Care Stabilization Grant by state: The Child Care Stabilization Grant is part of the American Rescue Plan Act (ARP Act) (Pub. Is the child care stabilization grant taxable? These grants are now available for eligible child care agencies in Tennessee. Can I add the attic space in my time-space% calculation? If so, the corporation must pay you with the grant money through your normal payroll process which means paying payroll taxes. If you will be pushed into a higher tax bracket if you take the money in 2021, you may be better off taking the money in 2022 when you will be in a lower tax bracket. Statement of Grant Opportunities Stabilization 1.0 Q: I refunded two weeks of care for a family that had to quarantine. The purpose of the child care stabilization grants is to support child care centers and home-based child care providers to stay open or reopen. 24 February 2023 . The NJ ARP Stabilization Grants range from $30,000 to $120,000 for licensed child care centers, depending on license capacity, provider type and monthly expenses. s,[[1c!yOOH-Nr Q: I understand I cant lower my employees wages, but what if the employee wants to work fewer hours? endobj
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p)Qk)LWIH67aJ9>jZ4V#^VQn'*T20Y';X+7sAOQ`+ZZ4&+!` Z+Z C2]/cLWIw<4mH:C7CQ9\x&KFX!8\Q4(mYO{N+CSLrcj'$"^)XG.aVa0WLT)&'q=y@xkJvh^A7T1Z Is this deductible? 9EJH-E*!PPRs&-L\1%gh7XXjZ/ K.4jq%E$ZT^:D+0mdEdUW#b=C\2CQ&j,AP5JRYMHj*6v)5oI DWH Q: Can I use the grant money to fully remodel my kitchen, put up new house siding, metal roof, new back deck? Painting is a repair. Ask your tax preparer to advise you. The answer is yes, these funds are taxable. A: You can use a vehicle for both business and personal purposes. Q: Can I get the grant even if I dont have any helpers? A: Yes, deduct the time-space% of this cost. A: Some states have different rules about this. endobj
Grant funding amounts and distribution schedule. Q: If I pay myself in order to make some changes that are not covered by the Stabilization grant, should I pay myself for the cost of the project, or is there some type of guidance I should use? <>
It had to be decontaminated and repaired. Important note: Although there is federal guidance on how the Stabilization grants are to be administered, each state may interpret this guidance slightly differently. Provider C receives a $3,500 grant and uses the money to pay for equipment that is used for both her business and her family (e.g., computer, television, furniture). Q: On my grant report I listed mortgage and utilities as expenses. The portion that she uses for businesses expenses can be deducted from her taxable income, but the other half cannot, and she will need to pay taxes on that amount. Q: How do I know how much I can ask for the grant? A: You could try to separate out these costs by comparing the square footage of the separate building with the square footage of your home. A: It depends on your familys financial situation. The application process and distribution structure varies from state to state, so check your local government website to confirm application deadlines and important dates. This funding is subject to the same state and federal tax rules as regular Child Care Development Fund (CCDF) funding. Yes. In other words if I use the standard meal allowance to claim my food expenses, wont this be the same amount as the reimbursements I received from the Food Program? Using grant money for 2020 has the same impact as paying yourself. Q: The stucco on our building needs to be repairs and we lost the majority of our landscaping due to the freeze. Providers can therefore use all or part of the grant to pay themselves. This can be done by transferring money from one bank account to another, writing yourself a check, or leaving money in one bank account and make a note indicating that this is money to pay yourself. $3,500 income $3,500 expenses = $0 taxable income and $0 taxes owed. CHILD CARE STABILIZATION GRANT DATA NCDHHS Division of Child Development and Early Education has created two data dashboards to provide Child Care Stabilization Grants summary data. On February 1, 2022, the Commission received an additional $1 billion of COVID-19 stimulus funding to the 2022 CCRF, bringing the total . Can I put it on my 2021 tax return? Q: You said we should only save our business records for three years. A: If you dont spend all of the grant money on items used 100% for your business, it will increase your business profit. A: The cost of any item that is used exclusively for your business can be deducted 100%. endobj
. Can I still use the standard meal allowance rate or must they use the actual expense method? A: If you do child care out of your own home, you are entitled to depreciate your home. Therefore, you would need to file 1099-Gs to avoid penalties for failure to file (Internal Revenue Code Section 6721) or failure to furnish (6722). Can I use the grant money for this or would have to pay myself first? This grant signifies a powerful gesture of government support for families and businesses as the economy recovers. ARP Stabilization Grants Congress awarded approximately $24 billion to the CCDF program with the goal of providing financial relief to child care providers to help defray unexpected business costs associated with the COVID-19 pandemic, and to help stabilize their operations so that they may continue to provide care. A: The PPP and EIDL programs are administered through the Small Business Administration. Under federal guidance, this clearly language clearly applies to a family child care provider, even if she has no employees. You do not have to pay back the Stabilization grant. Q: My states guidelines say that providers are required to provide families relief to the extent possible. For example, charging less tuition to assist parents. Claim this as a house repair on Form 8829. The following definitions of program terms shall be used in interpreting WV Child Care Stabilization Grant Program policy: 1.1.1. Not all applications are guaranteed to be approved. Email Us at: providerhelp@childcaresolutionscny.org. You can pay yourself with the EIDL loan. In this case, she can deduct the business portion of these expenses by estimating the percent of time they will be used for business versus personal purposes (usually her time-space percentage). The government has taken notice, and their answer is The Child Care Stabilization Grant, part of the American Rescue Plan Act (ARPA). Each state will receive anywhere from $39 million to $2.9 billion in funding from the grant to distribute as they see fit to eligible child-care providers. These funds will help early childhood and childcare providers keep their doors open and continue to provide these essential services that are critical for a strong economic recovery and a more equitable future. Q: If I only have one child, can I still apply for the grant? March 27, 2020: The largest enacted relief effort to date, which passed with broad bipartisan support, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, was signed into law.The CARES Act provided the Child Care and Development Block Grant (CCDBG) with $3.5 billion and Head Start programs with $750 million. See the funding breakdown by state, tribe, and territory, and more information about the grant on the. stream
She can deduct these expenses from the taxes she owes, so she will not owe additional taxes if she receives the grant. A: Yes, you can pay yourself any amount. Replace worn out bedroom carpet and hallway with wood floors? In South Carolina, these stabilizations grants are called "SC Building Blocks". A: Only if you already have a post-secondary degree. A: If you are self employed, look to see if you file IRS Form 1040SE. A: You can pay yourself with part or all of the grant money. Q: If I pay myself will I need to give myself a W-2? If it is permanently attached to the land, you must depreciate the business portion of the cost over 39 years. Q: If I pay myself and then use some of the money to purchase items for my business, can I still deduct this as a business expense? This is not a loan. Q: I gifted some of the grant back to parents because of COVID. What is the New Child Care Stabilization Grant? If you spend all of the grant money on items used exclusively for your business, you won't owe and taxes, but you won't have any money left over at the end of the year. Q: Can I use the Stabilization grant to replace my old central air condition unit? Operational Grant Formula Updated. JaJJ+7@h&P8=?xv:jA!tOUa@J]uym@%|4YX2 |[:&= 3q;n#}Ab!72d KNOgl0q8\l0'dP!_"g8X`G6"%Wi{nP"D\-;@Oi1)+fd-
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&A##807[uCo3./kECuzS:zRsu[G q>+hL OCFS has awarded $208 million to 12,578 child care providers through the Stabilization 2.0 for Workforce Supports grant. child care, child and adult protective services, adoption, and child support services. Consult your state for the answer. Childcare isnt just a family issue, its a business issue. This still leaves $2,100 for the provider to spend as she chooses (or save it). Q: Can I apply for the Stabilization grant if I already received the Paycheck Protection Program loan? Child Care Stabilization Funding DECAL recognizes the critical role that child care plays in supporting children, families, businesses, and the economy as a whole. <>/Metadata 2634 0 R/ViewerPreferences 2635 0 R>>
A: Yes! If you received any other phase of the Idaho Child Care Grant, you may still be eligible for this fourth grant. If they say you cant use it for this purpose, you can pay yourself and then use the money to rewire. A: Each state sets its own criteria. Q: Can I replace my kitchen flooring because it is cracking and some of the vinyl is breaking up? Funds must be used to support the key operating expenses of child care providers to help ensure access to child care for families. A: I dont know if you state would consider this a major improvement or not. This webinar, presented by child care business expert, Tom Copeland, will cover all the new tax changes affecting family child care providers for 2021. Q: If I pay a neighbor to paint my daycare with cash, how can I record this as an expense? No. The IRS has published information indicating that receipt of a government grant by a business is generally not excluded from the businesss gross income under the Federal Tax Code and therefore is taxable. You must claim grant funds in your businesss gross income. On October 19, 2021, the Texas Workforce Commission ( TWC) approved distribution of $2.45 billion in American Rescue Plan Act funds for direct relief to child care programs. Can I reallocate some of this money so I dont have to pay income taxes? Paying yourself involves nothing more than making a record indicating this. Is this correct? Phase three will include the closeout process for these funds. You can use this amount with grant money. She may keep the funds in the bank account as an emergency fund for later use or she can spend it as she wishes. Once you apply, you will be told how much you will get. You may use grant funds to pay for an accountant or financial advisor. If you cant get a clear answer from your state, you should pay yourself with the grant. To paint a picture, childcare centers today are facing decreasing revenues due to lower enrollment, higher expenses to operate safely during the pandemic and severe and ongoing staffing difficulties. Does that mean I cannot offer a monthly or quarterly bonus? Child Care Stabilization Grants Help Desk Support: 1-833-600-2074 eecgrantsupport@mtxb2b.com User Guide - Grant Survey Frequently Asked Questions Grant Requirement Supports: Family Child Care - Training for C3 Operational Grant requirements - YouTube Center-Based - Training for C3 Operational Grant requirements - YouTube Child Care Strong will be administered in the following three phases: Phase one will include information on eligibility, how to apply, report on the use of funding, and evaluate current operating expenses. %PDF-1.7
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o+$^1-{z(*EW~l3Md Y{'m"7E:OeegN$d8=Jby&afJISI. As an employee stipend software company that specializes in tax compliance, Compt can serve as your trusted guide to help administer the grant money in the form of an employee stipend, while staying fully compliant with federal tax law. Q: I have a separate building for child care on the same property as my home. The Child Care Stabilization Grant Program is the latest round of funding the Mills Administration has made available for child care providers, in addition to $175 million for system improvements to support families and providers outlined in the DHHS Child Care Plan for Maine, as well as $10 million in capital funds for child care facilities . After September 30, 2022, no additional CCSG awards will be made. Can I deduct this? No. Q: Is money I received from the Stabilization grant taxable income? Do you advise doing this? <>/ExtGState<>/XObject<>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI] >>/Annots[ 15 0 R 21 0 R 22 0 R 23 0 R 30 0 R 31 0 R 32 0 R 34 0 R 35 0 R 36 0 R 37 0 R 38 0 R 39 0 R 40 0 R 42 0 R 43 0 R 44 0 R 45 0 R 46 0 R 47 0 R 49 0 R 50 0 R 51 0 R 52 0 R 53 0 R 54 0 R 55 0 R 56 0 R 57 0 R 58 0 R 59 0 R 61 0 R 62 0 R 63 0 R 64 0 R 65 0 R 66 0 R 68 0 R 69 0 R] /MediaBox[ 0 0 612 792] /Contents 4 0 R/Group<>/Tabs/S/StructParents 0>>
Q: I am on the Food Program and I spent $100 a month for food, but am only paid $68 from the Food Program. A: State applications will often use the word personnel when describing what the grant can be used for. A: The standard meal allowance rate has been in effect since 2003. Therefore, its not a good idea to pay your husband. You can use it for free during a 30 day trial period. Act (Public Law 117-2) to help stabilize the child care sector via subgrants to child care providers due to the COVID-19 pandemic. 9857 et seq. Q: How do I find out where to apply for this grant? A: Yes, with the exception of a home, home improvement or home addition. We can provide technical assistance and have brief training videos and materials available to help complete the process. Consult with your accountant for more information. Distributing the funds to employees (most states require a portion of grant funds to be paid out to employees)? The Department of Children and Families (DCF) has allocated $351 million in funds for the Child Care Counts: Stabilization Payment Program to support Wisconsin's early care and education community. A: No. In this blog, Anna Mercer-Mclean details how she has utilized funding to increase salaries and benefits for her employees and her strategies to sustain providing ECE professionals their worth. A: If your state audits how you spent the grant, it is not likely they will audit the rest of your business. Workforce Innovation Sustain Child Care Subsidy Operations Start-up & Expansion Paycheck Protection Retention of Child Care Staff Supporting Centers in Preparing for Child Care Stabilization Grants The parents got a benefit, but you didnt. I feel like its just more income I have to claim and pay taxes on. Q: If I use the grant for my IRA, can I deduct 100% of this on my taxes? Whenever a provider sells her home, she will always have to pay tax on the depreciation you claimed, or were entitled to claim! You must recalculate your time-space% each year. Are you saying this is not deductible? When will I be notified of the new monthly grant amount that is effective October 1, 2023? Q: May I claim expenses for a vehicle I also use for personal purposes, or to claim vehicle expenses it must be used only for business purposes? Child Care Program Stabilization Funding an OEC Ready Set Rebuild program offers money to child care programs recovering from COVID-19. You can use the grant money to pay yourself and then pay off the loan. All organizations receiving funding must report this as income to your program. The Child Care Stabilization Grant is income to your business and is taxable by the state and federal government. Will I have to pay taxes on what I am getting reimbursed for? Q: Is the Economic Injury Disaster Loan (EIDL) a Stabilization grant or is this a loan that must be repaid? On another slide it says that state grants are taxable income. . The second child care stabilization grant was released on July 5, 2022. If you are a non-profit or not-for-profit organization, this funding is tax exempt. Q: We are a non-profit preschool facility in our church. Stabilization Grants Subject: Child Care Stabilization Grants Appropriated in the American Rescue Plan (ARP) Act (Public Law 117-2) signed into law on March 11, 2021. b+hxG%YM8bjW8PePQj@Cx9]3Nl6jSx $
V}$%*Qfky.zL@)^f@H{rVKJ4@(TKjZKBa0JjDRP+fT9efu'yur B9f9xk!>m7"`TPhghw /'toK|yk.I/pI:2oK[zt#'.0+mlbxGSC! There may be other grant programs offered in your state. A: You cant use grant money to pay someone who is not treated as your employee. Once you do that, you can then spend the money on a new roof. Are those grants considered taxable income? Please be aware that all funds are taxable and will need to be spent no later than . Should we spend everything that we receive with the grant? Q: You said that almost everything in your home is a deduction (welcome mat, chairs, flowers in your front yard), can you clarify if these are 100% deductible or time-space%? A: No. If you are a sole proprietor (self employed), you do not take out payroll taxes before paying yourself. How long do I have to stay in business if I receive stabilization grant funding? Child care providers that receive a grant have a reporting obligation on Form 1099-G if the amount is above $600. Q: How do I create an emergency fund with this grant? Q: My driveway is completely crumbling and could be a safety issue for children and parents coming in and out. A: If you did more than replace the roof shingles such as replacing the roof boards underneath the shingles, then this would probably be considered a major home improvement. Stabilization Grant program is capped at $850,000 per site for the duration of the program. All $20 million of the One-Time Supplemental Stabilization Grant funds was awarded in January 2022. . Q: When you give a bonus to your staff, do you treat the deduction the same as payroll deductions? To paint a picture, childcare centers today are facing decreasing revenues due to lower enrollment, higher expenses to operate safely during the pandemic and severe and ongoing staffing difficulties. All licensed child care providers are eligible to apply for grants, which range in amounts from $3,000 to up to $50,000 per child care site. 2023 BUILD Initiative. 1 0 obj
A: You can use the grant money directly for these expenses. For most providers, this would be about 30-40% in taxes. 3 0 obj
For tax purposes, she should reserve a portion of the grant amount to go toward her taxes. But, you can pay yourself with the grant money and then buy a new air conditioner. You will always be better off financially after taking a grant, even if it increases your taxes. Did this change? (wUu4JIvAcA:.*S5kL%4HSx
gx(#-ZN(?o]Zmp onB={ 0,1 IU]MCU If you are an employee, your employer is withhold Social Security/Medicare taxes and sending them on to Social Security quarterly. Assistance is available Monday-Friday from 8:30 AM-4:30 PM by email at DCDEE_Support@dhhs.nc.org or phone (919) 814-6300, Option 2. Q: How are my wages reported to Social Security? Provider A receives a $3,500[1] grant and uses the entire amount of the grant to pay herself; the full amount of the grant will be taxable, but the provider can spend the funds on whatever she wants (e.g., pay down personal debt, save for an emergency, save for retirement, go on vacation). The plan includes $24 billion in child care stabilization grant funding for states, territories, and tribes to distribute within their state using the Child Care and Development Grant (CCDBG) formula. The tax implications of the grants depend on several factors, namely, how the provider uses the funds, the providers household income, and possibly the state in which they live. A: Yes, deduct your time-space% of the cost in one year. Q: Can I use the grant to replace my rock driveway with a paved driveway? OCFS A: Colorado says they encourage providers to give 50% to parents. Instead, start making contributions to your IRA. It may be the same or may not. If you dont spend it all you will have to return the unspent money. A: An employee can work fewer hours and that wont impact the grant. Take the money! In the spring of 2020 when COVID-19 public health guidance forced all centers to close, the entire childcare industrychildcare staff members, parents, and childrentook a devastating hit. A: You cannot use the Stabilization grant to pay off a previous loan. A: No. A: You arent paying yourself for any particular hours you work. This income will not be the same as your food expenses. I thought it was seven years. The two-year grant period is scheduled to end in September 2023, meaning eligible employees may receive . Here is the recording of my recent webinar, Child Care Stabilization Grants and New Tax Changes for 2021., The tax implications of the Stabilization Grants, What expenses can be deducted in your business. Provider As household income is low enough; she may only owe the 15 percent in social security and Medicare expenses and can keep $2,975 for any use. Your state may or may not see this as a major improvement. Using Indiana's federal COVID-19 relief funding, the Office of Early Childhood and Out-of-School Learning (OECOSL) launched the Build, Learn, Grow Stabilization grant program to provide critical funding to early childhood and school-age providers, support their program's operating expenses and help them rebuild their programs for the future. Family child care providers must report any portion of the stabilization grant that they use to pay themselves as taxable income on their federal and state income tax return (unless their state chooses to make the grant not taxable). You will owe 15.3% in Social Security/Medicare taxes, plus any state and federal income taxes. A: No. Child Care Stabilization Grant Questions and Answers. A: Assuming the money you spend on items for your business are used exclusively for your business, the tax consequences are the same as paying yourself. A: You can count all the hours children are present in your home. Funds are in place so every eligible program can receive one grant per facility/site. Q: I use my car for my business. How am I doing that? Certificate of Registration: A statement issued by the Commissioner for a period of up to two years to a family child care home upon receipt of a self-certification statement 1 0 obj
A: I dont know the answer for your particular state, sorry. Q: Can I call my employee back after receiving the grant, even if I only have two children in care? A: Yes! A: I assume you are on payroll because you are being treated as employee of a corporation. Please consult your tax professional, if you have an income tax questions or concerns. Eligibility Application Recertification Questionnaire Training Grant Funds Can I add a roof for shade, electricity, for fans, light and screens against insects. This funding is subject to the same tax rules as regular CCDF funding. %
Investing in Iowa's Child Care (IICC) Funding Program ?y-|G1H3/_|/I'>_|!P,0ZE2:PTon_h As we all know, parents need access to safe, quality child care to get back to work. Q: May I use the standard meal allowance rate to claim food expenses for an employee that eats food while working in my home?