Phase two will include application, awarding, and issuing of funding. 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. For tax purposes, she should reserve a portion of the grant amount to go toward her taxes. With this funding the Illinois Department of Human Services continued the Child Care Restoration Grants (CCRG) and provided 6 rounds of CCRG grant funding from January 2021 - December 2022, providing over $6 million in relief funding to child care programs in Illinois. Building Equitable Early Childhood Systems, Early Care & Education Quality Initiatives, Harnessing Opportunities for Positive Early Childhood (HOPE), The True Cost of Providing Safe Child Care During the Coronavirus Pandemic, Help is on the way! See the funding breakdown by state, tribe, and territory, and more information about the grant on the White House American Rescue Plan Funding Fact Sheet. A: No! Child Care Stabilization Grant Questions and Answers. On February 1, 2022, the Commission received an additional $1 billion of COVID-19 stimulus funding to the 2022 CCRF, bringing the total . Investing in Iowa's Child Care (IICC) Funding Program Q: If I only have one child, can I still apply for the grant? A: No. Q: Can I claim my couch as a tax deduction if its used by my daycare children? See this from the AARP website. A: State applications will often use the word personnel when describing what the grant can be used for. 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. 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]. A: No. Afterwards it costs $99.00 a year. Q: Can I pay myself any amount? Can I add the attic space in my time-space% calculation? Q: How can I build up my Social Security benefits before I retire when my profit has not been very high? A: If you pay your husband you must treat him as an employee and file the W-2, not a 1099. If the separate building is 40% of the size of the home, then deduct 40% of these costs. Beginning November 1, 2021, DHS will be using American Rescue Plan Act (ARPA) funding to increase the number of monthly absent days for the Child Care Assistance (CCA) program from 4 to 6. oRT@ 66V'aNAS\u8g<05!rzf7M- (bw1RK51 wOffHg]tJ}%NaiIrIV.y3*2w@LIGFIm(IsMv s,[[1c!yOOH-Nr Q: I have two workers and pay them in cash and hope to give them IRS Form 1099. 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. You should amend your 2020 taxes and report it as income and pay taxes on the amended return. Q: How to I calculate the percentage of mortgage payments? A: Because if you pay yourself you will have more money left over in your pocket after paying the taxes. 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 The American Rescue Plan Act (ARPA) has provided resources to states to distribute stabilization grants to child care providers to ensure that child care is available to support families and businesses as the economy recovers. A: I dont know. A concrete slab in the backyard used for basketball, skating, etc.? It doesnt matter if you havent lost any children. Paying yourself involves nothing more than making a record indicating this. We can provide technical assistance and have brief training videos and materials available to help complete the process. A: You can claim expenses for your vehicle using either the standard mileage method or the actual expenses method. Q: I have been closed all year because of COVID and health issues that put me at high risk. Q: Is money I received from the Stabilization grant taxable income? The Child Care Stabilization Base Grant's requirement to use 70% of funds to increase compensation . You must treat people who help you care for children as your employees, subject to all the payroll taxes. A: If your state audits how you spent the grant, it is not likely they will audit the rest of your business. 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. A: Yes, you can pay yourself any amount. endobj
Q: I need a new washer, dryer and water heater. June 02, 2021. Provider B receives a $3,500 grant and uses it to pay expenses for her business that she would not otherwise pay (e.g., extra employee wages, cleaning supplies, toys). 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? Q: How do I find out where to apply for this grant? Q: Can I deduct the business portion of any item in one year regardless of the cost? This webinar, presented by child care business expert, Tom Copeland, will cover all the new tax changes affecting family child care providers for 2021. endobj
YGF:JKSj"tZO+rR&e ]ii D I . Registered family child care providers are eligible for $4,000 in grants. A: I assume you are on payroll because you are being treated as employee of a corporation. How do I get the childcare stabilization grant? Distributing the funds to employees (most states require a portion of grant funds to be paid out to employees)? Q: Can I call my employee back after receiving the grant, even if I only have two children in care? Is the Child Care Program Stabilization Funding taxable? Example 3: Provider uses some of the grant to pay herself and some for business expenses. Child Care Relief Funding 2022. Q: Are the Stabilization grants available in Canada? Statement of Grant Opportunities Stabilization 1.0 The second child care stabilization grant was released on July 5, 2022. A: Depends on what your state says. Q: If I use the grant for my IRA, can I deduct 100% of this on my taxes? In almost every situation, a provider will benefit financially from these grants even after taxes. Using a reimbursement model, management and reporting is easy and takes the burden off your HR team. <>/Metadata 2634 0 R/ViewerPreferences 2635 0 R>>
This grant signifies a powerful gesture of government support for families and businesses as the economy recovers. In general, every licensed or regulated provider is eligible. x][s8~OUNIS6MxJyzdS3 KY)13ed
b6|0-Fiqaps7+y1;? A: Dont reduce your business expenses to show a larger profit, even if that might slightly increase your Social Security benefits. Child Care Stabilization Fund 5 Q: How many rounds of payments will be made? But, they will reduce your federal and state taxable income. A: I am sorry to hear this. Keep enough records to show that children are present 24 hours. Q: My front steps/deck needs to be replaced because of rotted boards. Can I give him a $500 bonus? A: Yes! A: Its a repair because you didnt remodel the entire kitchen by replacing just the cabinets. Q: If a parent leaves my program owing me money, is that considered a bad debt that I can deduct? 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: Yes, deduct the time-space% of this cost. A: RI DHS aims to approve two stipends to all eligible providers, depending upon fund availability. 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. Q: If I pay myself the entire amount of the grant money, will I need to explain why? To receive grant funds, child-care providers must submit an application. Q: We started adding more kitchen cabinets this summer. The amount your reduced tuition would have no impact on your taxes. Why are the first two programs not taxable income? No. around the country, mostly small businesses, who were already operating on thin margins. How do I treat this on my taxes? Dental crown not covered by insurance? Q: May I decrease wages for employees during the grant period? Law 117-2), signed on March 11, 2021, includes $23.97 billion for child care stabilization grants to be allocated to states, territories, and Tribes based on the current Child Care and Development Block Grant (CCDBG) formula. Since you cant deduct these expenses on your 2021 tax return, youll owe taxes on the amount you apply to 2020 expenses. Keep in mind that all of these funds are taxable, so maintain records of how you . Are these expenses 100% business or time-space% deduction? Take a before and after picture of the area he painted. A: Apply your time-space% to the monthly mortgage payment. What dates matter for the child care stabilization grant? Our goal is to help your program become financially secure. 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. The following examples are meant to illustrate the different ways in which a family child care provider might utilize the grant and the tax implications of each scenario. Will I have to pay taxes on what I am getting reimbursed for? 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! Q: Can I use the Stabilization grant to purchase a home? Youll have to contact Social Security directly. Contribute to a SEP IRA or Roth IRA? <>
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+` _-gNT_eS?o9u"V)p y[7 This blog explores the tax implications of the American Rescue Plan Act (ARPA) Child Care Stabilization Grants for Home-Based Child Care Providers. No other family income will be affected, meaning you wont pay higher taxes on any non-grant income. endobj
However, even if it does push you into a higher tax bracket, it only means you will pay more in taxes on the grant amount that is in the higher tax bracket. Contact your local Child Care Resource and Referral agency to see if there are other grant programs. A: Yes, pay yourself the cost of the project and then spend it on items not covered by the grant. Stabilization Grant Guidance FAQs. stream
The answer is yes, these funds are taxable. Important note: Although there is federal guidance on how the Stabilization grants are to be administered, each state may interpret this guidance slightly differently. endobj
The National Center on Early Childhood Quality Assurance and its partners at First Children's Finance shared information about the stabilization grants coming to states, territories, and Tribes. A: The PPP and EIDL programs are administered through the Small Business Administration. You cant count repairs if you use the standard mileage method, but you can count repairs if you use the actual expenses method. A: If you are self employed, you are filing IRS Form 1040SE which calculates how much Social Security/Medicare tax you owe. If you are a non-profit or not-for-profit organization, this funding is tax exempt. Can I reallocate some of this money so I dont have to pay income taxes? 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. 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. Using Child Care Stabilization Grant funds to pay federal taxes is not an allowable expense. Can painting the house be deducted as a repair? Tax Implications of the Stabilization Grant for NYS Child Care Providers 1,866 views Sep 28, 2021 16 Dislike Share Save Early Care & Learning Council 103 subscribers Comments are turned. Does that mean I cannot offer a monthly or quarterly bonus? There is not law that requires you to stay in business. You want to claim this large deduction. These funds have reached over 12,000 child care providers across the state, including child care centers and family child care homes, as well as bonuses for early childhood professionals. There has never been this amount of federal funding dedicated to childcare providers, which makes this an incredible opportunity. 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? A: You can use a vehicle for both business and personal purposes. No! 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! A: Each state sets its own criteria. Good news - Child Care Relief Funding 2022 is here! Child Care Stabilization Grants The American Rescue Plan Act of 2021 (ARP Act) (Pub. Q: May I use the standard meal allowance rate to claim food expenses for an employee that eats food while working in my home? endobj
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. Q: Does the federal guidance for this grant require providers to gift any of it to parents? %
Can I deduct this? Help is on the way! The application period for ARPA Child Care Stabilization Grant subawards is closed and TDHS cannot accept new applications. 1 0 obj
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. If you received any other phase of the Idaho Child Care Grant, you may still be eligible for this fourth grant. Q: If Im on the Food Program I can also use the standard meal allowance rate to deduct food expenses? Get more information about KidKare. A: No. A: You can count all hours that you work in your home, either caring for children or doing other business activities. In other words, lets say you paid yourself $5,000 and used $2,000 for items used 100% for your business. Q: Can I claim Social Security on my ex-husband? A: You can use the grant money directly for these expenses. In response to the COVID-19 public health emergency and its impact on the child care industry, President Biden signed the American Rescue Plan Act of 2021 (ARP Act). Q: How to I calculate my Time Percent when children are in my care 24 hours a day? How do you determine your salary? If he did, then you properly paid your Social Security/Medicare taxes. State tax rules apply. While each state, territory, or tribe can specify the specific uses of grant funds, the funds are intended to support providers general operating expenses, wages and benefits to employees and owners, rent, utilities, cleaning and sanitation supplies and services, and other goods and services needed to maintain or resume operations as well as mental health supports for children, families, and employees. Q: Can we pay ourselves in 2022 with grant money from 2021? Q: If someone takes the grant and decides they no longer want to be in daycare, will they have to reimburse the money received? Method, but you can use a vehicle for both business and purposes. File the W-2, not a 1099 # x27 ; s requirement to use 70 % of this.. 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