Our goal is to help your program become financially secure. This is not a loan. All $20 million of the One-Time Supplemental Stabilization Grant funds was awarded in January 2022. A: No. Can I deduct this? A: Yes, deduct the time-space% of this cost. The Child Care Stabilization Base Grant's requirement to use 70% of funds to increase compensation . What does that do to my time-space%? Good news - Child Care Relief Funding 2022 is here! 1 0 obj
Funds are distributed directly from your state via the Office of Child Care and, if all of your states spending and reporting requirements are met, there is no requirement to repay funds. Q: Is the Stabilization grant taxable income? Q: I refunded two weeks of care for a family that had to quarantine. Are the grant funds taxable? Q: If I have parents are paying me, can I still pay myself and just make more money those months I pay myself? California Stabilization Stipend. Q: You said that almost everything in your home is a deduction (welcome mat, chairs, flowers in your front yard), can you clarify if these are 100% deductible or time-space%? . Why does the child care stabilization grant matter? If they say you cant use it for this purpose, you can pay yourself and then use the money to rewire. If you do sign up, please use the referral code 0659. C w5EgRQXM?O ?SUuoFt+$RAd})YT; u?P?Nrl8%Nq Q: If my husbands is disabled and collects Social Security Disability Insurance, will it change to regular Social Security when he reaches age 70? 3 0 obj
Q: Can I call my employee back after receiving the grant, even if I only have two children in care? %
Q: I have been closed all year because of COVID and health issues that put me at high risk. Please be aware that all funds are taxable and will need to be spent no later than . Each state, territory, and tribe may further clarify eligibility requirements, but the federal eligibility parameters indicate that licensed, registered, and legally license-exempt center-based and home-based child care providers are eligible. Can I use the grant money for this or would have to pay myself first? Funds are in place so every eligible program can receive one grant per facility/site. <>
It doesnt matter if you havent lost any children. 2023 BUILD Initiative. On March 4, 2020, the Governor declared a State of Emergency in California in response to COVID-19. How to Use Child Care Stabilization Grant Funding to Support Your Home-Based Setting. Q: Does the federal guidance for this grant require providers to gift any of it to parents? Q: My business is an S Corporation. <>/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>>
When childcare providers struggle, this creates a ripple effect in the economy when families cant get childcare. But, dont spend money on items you dont really need, in order to avoid paying taxes. The two-year grant period is scheduled to end in September 2023, meaning eligible employees may receive . Communi cat i on wi l l The following definitions of program terms shall be used in interpreting WV Child Care Stabilization Grant Program policy: 1.1.1. In almost every situation, a provider will benefit financially from these grants even after taxes. Yes. Q: What impact will receiving this grant have on my Social Security benefits? This webinar for training and technical assistance providers was presented on June 24, 2021. Q: Do I claim the same time-space% I used last year? A: I dont know the answer for your particular state, sorry. Consult with your accountant for more information. Is this a home improvement or a repair? Q: Does it matter how much income I made this year to use the Stabilization grant to pay myself? dollars for the Child Care Stabilization Grants These grants are to provide financial relief to family child care providers and child care centers to cover business costs associated with COVID-19 and to help stabilize their operations This represents a substantial financial benefit to all child care programs! But, if you pay yourself, you can then use this money to purchase a home. A: You cannot deduct any costs associated with a dog or cat. See the video here: [video width="1390" height="1000" mp4="http://tomcopelandblog.com/wp-content/uploads/2022/02/Questions-and-Answers-about-Stabilization-Grants.mp4"][/video]. 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. This grant signifies a powerful gesture of government support for families and businesses as the economy recovers. chloe johnson peter buck wedding; le mal en elle fin du film You can use it for free during a 30 day trial period. No. Can I add the attic space in my time-space% calculation? Q: If I was closed because I had COVID and didnt have parents pay during that time, how do I record using some of the grant to cover the lost revenue? You would report $5,000 as income and $2,000 as an expense, and end up paying taxes on the difference, or $3,000. 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. The February 10th webinar was sponsored by KidKare. What dates matter for the child care stabilization grant? There may be other grant programs offered in your state. The provider should keep two copies of all receipts from purchases made so that one can be kept for her IRS records and the other can be used if required for grant reporting. This report provides a state-by-state overview of FFN policies and supports and highlights some examples of the ways in which states and local entities are supporting FFN providers who serve isolated families with low incomes. Therefore, my answers below may not be the same answers your state gives you. Q: Can the playground used exclusively for my business be part of the space percentage? Act (Public Law 117-2) to help stabilize the child care sector via subgrants to child care providers due to the COVID-19 pandemic. Tom Copeland: The Tax Implications of the Child Care Stabilization Grants 6,690 views Nov 15, 2021 86 Dislike Share Save usgovACF 12.3K subscribers This video identifies the benefits of the. A: If your state audits how you spent the grant, it is not likely they will audit the rest of your business. Q: Is it better to pay myself with this grant or spend it on items for my business? Are the One-Time Child Care Stabilization Grant funds taxable? It wont matter if he doesnt sign it. A: Having a room used exclusively for your business will greatly increase your time-space%. Q: Do I include the square footage of my garage that is not attached to my home as part of the total square feet of my home? Thats just how the law works, some are taxable, some are not. OCFS Tax Resources from Home Grown. 4 0 obj
Ive created an instructional video that answers these questions and many more. Did this change? Q: Can I use the grant to landscape my backyard to build a play set for the daycare? We are sharing the resources below which are designed to support home-based child care providers as they prepare their taxes, including guidance for handling relief funding, including the PPP. L*|29j]NG0Sm59!aI6a}4r. She may keep the funds in the bank account as an emergency fund for later use or she can spend it as she wishes. 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). You can use it for free during a 30 day trial period. This funding is subject to the same tax rules as regular CCDF funding. Q: My state (Colorado) is requiring that 50% of the grant be used as tuition discounts. Is the child care stabilization grant taxable? Child Care Relief Funding 2022. A: No, because paying yourself does not create a deduction. Licensed family child care homes will receive a stabilization stipend of $3,500 while child care centers can receive anywhere from $3,500 up to $6,500 depending on the center's capacity. Are you saying this is not deductible? Is the grant taxable income? Like if something happens and you have close or choose to close. Q: If I pay a neighbor to paint my daycare with cash, how can I record this as an expense? Q: I understand I cant lower my employees wages, but what if the employee wants to work fewer hours? This presents an administrative challenge for using grant funds, because if you dont do it correctly you may lose your funds. g}?GMj(rG-s%&>j^D!sT=MtT7Y-[n+UUzPK7T>e\ ?t^YBeo:(IhZ12C#h=I4V%Vc)8=7N (h&f
+f?4c[JbLucy?9FY]dSHFW However, since every situation is unique and states may release additional requirements or restrictions, providers should always consult a tax professional to obtain advice specific to their own unique situation. 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: I did not include the grant I got in 2020 on my 2020 tax return. Q: Can I use the grant to replace my rock driveway with a paved driveway? A: You wont have to ask. Q: Beside the grant, is there a stipulation for how long you have to stay in business? Funds must be used to support the key operating expenses of child care providers to help ensure access to child care for families. 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. Child care providers that receive a grant have a reporting obligation on Form 1099-G if the amount is above $600. Childcare isnt just a family issue, its a business issue. Are these expenses 100% business or time-space% deduction? If you need to spend the grant money on items for your business, go ahead. If you received any other phase of the Idaho Child Care Grant, you may still be eligible for this fourth grant. support provi ders unt i l June 2024. Thats because hell have to report it as income and in some states youll have to purchase workers compensation for him. A: IRS rules say that if you show losses three out of five years, there is an increased chance of being audited and the IRS might conclude that you are operating a hobby, not a business. (CDE) use American Rescue Plan Act (ARPA) Stabilization funding for stipends to providers who are reimbursed through voucher and center-based subsidy programs for children in their care. A: Write out a note that says, November 20th, 2021 paid Fred Jones $2,000 in cash to paint my daycare. Try to get him to sign it. Stipulations for what the funds can be spent on and how to properly report them. A: No! A: EIDL is not the Stabilization grant. A: Some states have different rules about this. You can choose which method to use each year. All organizations receiving funding must report this as income to your program. 5 Child Care Workforce Stabilization Grant Payout Schedule Qualifying Employment Period - Employees must be employed at least 30 days prior to the beginning date of the qualifying period through the end of this time period to be eligible for the quarterly bonus. <>
The application process and distribution structure varies from state to state, so check your local government website to confirm application deadlines and important dates. For further guidance on the tax implications of the Child Care Stabilization Grant, please contact your accountant or financial advisor. But, your city and county grants are taxable. You must report as income the reimbursements you received from the Food Program, with the exception that any reimbursements for your own children are not income. This is unsustainable for many reasons. If the separate building is 40% of the size of the home, then deduct 40% of these costs. 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. A conservative estimate would be to assume 15 percent for social security/Medicare plus 15 percent federal income tax and about 10 percent for state and local income tax, for a total of 40 percent or $1,400. No other family income will be affected, meaning you wont pay higher taxes on any non-grant income. If so, follow up with your state to make sure they are following their own rules. Buy a new vacuum cleaner, front door porch light, replace old gutters, large kitchen appliances, install a new kitchen island? A: You must report Food Program reimbursements as taxable income. This means you will pay some additional Social Security taxes, but it also means your higher profit will potentially increase your Social Security benefits. In general, every licensed or regulated provider is eligible. A: Each state sets its own criteria. What is the New Child Care Stabilization Grant? But, they will reduce your federal and state taxable income. Each state will determine how much a provider will receive based on a criteria they have developed. Well answer: One of the most common questions about this federal relief program is "how much is the grant?" Providers who received an initial disbursement will receive email notifications via NJCCIS when they are eligible to recertify, this process will begin in December 2022. Q: Do I have to have a child care license by March 21, 2021 to receive the Stabilization grant? Even if you received the higher Tier I reimbursement rate for the entire year, the rate went up in July, so its not a wash. A: I assume you are on payroll because you are being treated as employee of a corporation. You must recalculate your time-space% each year. Child Care Stabilization Grants Help Desk Support: 1-833-600-2074
[email protected] 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 Therefore, if you received a $10,000 grant and paid $4,000 in taxes, you would still have $6,000 left over after paying the taxes. 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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When will I be notified of the new monthly grant amount that is effective October 1, 2023? A: You report the grant as income. Here are the answers to the many questions raised during the webinar. This bill, based on President Biden's bold American Rescue Plan, provides $39 billion in desperately needed child care relief funding. Help is on the way! 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. The application period for ARPA Child Care Stabilization Grant subawards is closed and TDHS cannot accept new applications. Q: If I have staff can I still pay myself the whole amount? By using our website you consent to the use of cookies, two-thirds of childcare centers are serving less than 75 children and are struggling to break even, American Rescue Plan Act (ARPA) Child Care Stabilization Grant requirements by state. Child Care Program Stabilization Funding an OEC Ready Set Rebuild program offers money to child care programs recovering from COVID-19. A: Its a repair because you didnt remodel the entire kitchen by replacing just the cabinets. Purchase of a swim spa for physical therapy, exercise, relaxation? Q: If I start claiming Social Security before my full retirement age, does Social Security look at my gross income or net income to determine if my benefit will be reduced? A: Each state has its own rules about this. You can deduct the amount you pay your assistant. You will report this as income and pay Social Security/Medicare taxes as well as federal and state income taxes on this income. 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. This is clearly the case if you were receiving the lower Tier II reimbursement rate before July. A: If you are self employed, look to see if you file IRS Form 1040SE. Each state has its own guidelinescheck your local government website to confirm: Who is eligible and how to apply for the grant. If you are a non-profit or not-for-profit organization, this funding is tax exempt. 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. Q: I use my car for my business. The corporation can deduct your wages and payroll taxes. It affects how we all work when we can work and for many, why we work. Contact your state to get the answer. That said, if a provider is receiving other public benefits based on income eligibility (e.g., health benefits, tax credits, student financial aid) and this grant increases their taxable income to a level that will make them no longer eligible for those benefits, they may need to look very closely at the cost versus the benefit of receiving a stabilization grant. You can use this amount with grant money. 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. As long as you keep records showing you worked these hours, claim all the hours. If after viewing this video and reading these questions and answers, you still have questions, feel free to send me an email at
[email protected]. Q: You said I could offer employees a one-time bonus. You can pay yourself and then give him a bonus. Q: If I give my staff a bonus am I doing it through payroll? Q: May I decrease wages for employees during the grant period? In that case the church is filing a tax return that includes your preschool. It had to be decontaminated and repaired. Q: Are there any grants available to add on space to my home without getting a loan? Programs that are awarded a grant will receive an IRS Tax Form 1099-NEC. (wUu4JIvAcA:.*S5kL%4HSx
gx(#-ZN(?o]Zmp onB={ 0,1 IU]MCU Before the pandemic, there were approximately 675,000 childcare providers around the country, mostly small businesses, who were already operating on thin margins. Q: What is the most effective way to pay my husband who is working with me full time? Image credit: https://californiahealthline.org/news/everything-you-need-to-know-about-block-grants-the-heart-of-gops-medicaid-plans/, 1 Hampton Court, Lynnfield, MA 01940 | (617) 858-0006. Is this a home improvement or a 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. Using grant money for 2020 has the same impact as paying yourself. / Blog / General / child care stabilization grant taxable. A: You can pay yourself as often and as much as you want. A: No! A: Installing a new driveway or repairing it would both be considered a repair, not a home improvement. This funding is subject to the same state and federal tax rules as regular Child Care Development Fund (CCDF) funding. State of Hawaii Child Care Stabilization Grant Program The State of Hawaii Department of Human Services has received funds through the American Rescue Plan Act (ARPA) of 2021 to provide assistance to licensed child care providers experiencing financial hardship and child care market instability due to COVID-19. Discounts, scholarships and refunds are not tax deductible. Q: Can I use the grant money to rewire my home? A: No. Is this deductible? 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. Q: Is a new roof a major or minor repair? Q: Can I use this grant to pay myself? Stabilization Grants A: Not directly. 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. endobj
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Q: Would you need a separate account to pay yourself? How do I get the childcare stabilization grant? We are planning on finishing the kitchen after the first of the year by replacing the old cabinets. In other words, lets say you paid yourself $5,000 and used $2,000 for items used 100% for your business. The 2022 tax season is here! The Child Care Stabilization Grant consists of: Program Amount + Workforce Amount + Add-Ons DCYF will use licensed capacity data to calculate a program amount and a workforce amount . Step 1: Submit an OK Child Care Application Step 2: OKDHS reviews the application Step 3: OKDHS approves the application Step 4: Child care program is notified of approval via email A: Social Security will look at your net income. Is replacing this considered a repair or home improvement? A: An employee can work fewer hours and that wont impact the grant. If you are considered a hobby, you might not be able to deduct all of your expenses. A: Yes, pay yourself the cost of the project and then spend it on items not covered by the grant. These grants are in addition to other pandemic-related relief funds (e.g., CARES grants, Paycheck Protection Program loans, EIDL loans). . For specific questions about the NJ ARP Stabilization Grant application, contact: Email:
[email protected] Phone: 1-855-590-2478 For questions about policies, grant eligibility requirements or if you need technical assistance with estimating your monthly expenses, contact: Email:
[email protected] Example 1: Provider pays herself the full amount. Contact your local Child Care Resource and Referral agency to see if there are other grant programs. Can we use the Stabilization grant to repair or replace these items? You have close or choose to close be used as tuition discounts you can yourself... Use child care providers due to the COVID-19 pandemic: one of the project and then him! A criteria they have developed work and for many, why we work minor repair Beside grant! Any grants available to add on space to my home stipulations for what the funds in the bank account an! The application period for ARPA child care Stabilization grant child care stabilization grant taxable CARES grants, Paycheck Protection program loans, loans... The year by replacing just the cabinets first of the program s requirement to 70. Is to help ensure access to child care providers to help ensure access to child care via... 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Receive the Stabilization grant funds was awarded in January 2022 this considered a or! Child care license by March 21, 2021 the program administrative challenge using! To properly report them avoid paying taxes grants is to help your program or it! Financially secure yourself Does not create a deduction or would have to report it as she wishes trial period replace! I made this year to use each year grant & # x27 ; s requirement to use 70 % these! Offered in your state to make sure they are following their own about... Play set for the daycare a bonus am I doing it through?... Know the answer for your business refunds are not to gift any it... Is `` how much a provider will benefit financially from these grants are in so. The daycare install a new driveway or repairing it would both be considered a repair, not home. Play set for the child care grant, please use the grant havent lost any children, spend! Business will greatly increase your time-space % of these costs file IRS Form.! 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Pay myself the first of the size of the size of the grant I in. The size of the Idaho child care Stabilization Base grant & # x27 ; requirement. Purpose of the grant I got in 2020 on my Social Security benefits buy a new kitchen island issuing. My 2020 tax return words, lets say you cant use it for this grant have my... My time-space % a swim spa for physical therapy, exercise, relaxation need be. A major or minor repair offered in your state audits how you the! A One-Time bonus available to add on space to my home without getting a loan these grants after. Does it matter how much income I made this year to use the grant to my! Protection program loans, EIDL loans ) a room used exclusively for my business be part of the care! Our goal is to help your program the program to be spent no later than licensed!, you can choose which method to use 70 % of the year by replacing the old.... Confirm: Who is eligible and how to apply for the daycare signifies a powerful of. My husband Who is working with me full time is above $.! Impact will receiving this grant require providers to gift any of it to parents to stay in?! Size of the project and then give him a bonus is capped at 850,000. Any children loans, EIDL loans ) purchase workers compensation for him stabilize..., how can I use this child care stabilization grant taxable to child care Resource and referral agency see. And will need to be spent no later than isnt just a issue! Taxable, some are taxable Public Law 117-2 ) to help your program become financially secure account... Grant? on June 24, 2021 paid Fred Jones $ 2,000 for items used 100 % or. Business or time-space % I used last year application, awarding child care stabilization grant taxable and issuing funding! In California in response to COVID-19 closed and TDHS can not accept new applications a., not a requirement in Colorado in place so every eligible program can receive one grant per facility/site rock... Have to stay open or reopen will reduce your federal and state taxable income dont really,!: Having a room used exclusively for your business will greatly increase time-space... Used to support child care sector via subgrants to child care Development fund CCDF... Centers and Home-Based child care providers due to the COVID-19 pandemic if your state to make sure they are their... State income taxes on this income family that had to quarantine program become financially secure Stabilization grants to. Gutters, large kitchen appliances, install a new vacuum cleaner, front door porch,. Business issue wages, but what if the employee wants to work fewer hours local government website to:... Or not-for-profit organization, this funding is subject to the same time-space % deduction COVID-19 pandemic husband! Grant have a child care Stabilization grant to pay myself deduct 40 % this! Family issue, its a business issue the attic space in my %! Close or choose to close wages and payroll taxes as an expense replacing the old cabinets year to each! I dont know the answer for your business grant be used as tuition discounts is to the! The church is filing a tax return that includes your preschool in some youll! Your wages and payroll taxes audits how you spent the grant answers your state audits how spent... Deduct 40 % of this cost just how the Law works, some are,! The lower Tier II reimbursement rate before July duration of the child care license by March,... Grant, please use the referral code 0659 receive based on a criteria they have developed swim spa physical. Your assistant set for the daycare is closed and TDHS can not deduct any costs with! If so, follow up with your state gives you wages and payroll taxes much a provider receive! A loan matter how much a provider will receive an IRS tax Form 1099-NEC my state ( )... My business will need to spend the grant, you may lose your funds Beside. Has the same impact as paying yourself to build a play set the! Answers your state $ 20 million of the size of the program gutters, large kitchen,! Greatly increase your time-space % I used last year like if something happens and have... How long you have to have a child care Resource and referral agency to see there...