This funding is subject to the same tax rules as regular CCDF funding. 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. The application process and distribution structure varies from state to state, so check your local government website to confirm application deadlines and important dates. 24 February 2023 . If you cant get a clear answer from your state, you should pay yourself with the grant. 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 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. Child Care Relief Funds The following applications are available to eligible child care providers to apply for relief funds. This is clearly the case if you were receiving the lower Tier II reimbursement rate before July. For example, can I give one employee $500 and another employee $300 if they are not as productive? Programs that are awarded a grant will receive an IRS Tax Form 1099-NEC. If you do sign up, please use the referral code 0659. 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. Q: Are the Stabilization grants available in Canada? Q: What impact will receiving this grant have on my Social Security benefits? A: An employee can work fewer hours and that wont impact the grant. A: Installing a new driveway or repairing it would both be considered a repair, not a home improvement. 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. This income will not be the same as your food expenses. Family Child Care Home, Group Family Child Care Home, and license-exempt providers will apply for both stipends through one grant application and will receive one payment. Can I use the grant to hire a clean-up crew? Q: Does it matter how much income I made this year to use the Stabilization grant to pay myself? The application period for ARPA Child Care Stabilization Grant subawards is closed and TDHS cannot accept new applications. Your state may or may not see this as a major improvement. Phase 4 of the Idaho Child Care Grant provides funding for child care providers in Idaho to ensure they are able to remain open and caring for children. A: Yes! Q: May I decrease wages for employees during the grant period? 2 0 obj Will I have to pay taxes on what I am getting reimbursed for? Q: Because of all my deductions I did not show a profit for three years. As long as you keep records showing you worked these hours, claim all the hours. Help is on the way! In other words, if you reduced tuition by $5,000 you would show $5,000 less in parent fees, but you would still report the $5,000 from the Stabilization grant that replaced this as taxable income. $3,500 income $3,500 expenses = $0 taxable income and $0 taxes owed. 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? T he new mont hl y grant amount and pol i cy i s i n process and under revi ew. How am I doing that? Q: If I have staff can I still pay myself the whole amount? <> Can I add a roof for shade, electricity, for fans, light and screens against insects. Is this a deduction? This means you will pay some additional Social Security taxes, but it also means your higher profit will potentially increase your Social Security benefits. Q: Is this grant available to centers that have grade school children and are licensed by the Department of Education instead of the Department of Human Services? Is replacing this considered a repair or home improvement? This is not a loan. 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: If I use the grant money to pay myself and then use the money to repair my home or fix my basement, can I deduct this as a business expense? . 721 Smith Rd. Here are the answers to the many questions raised during the webinar. Q: Do I claim the same time-space% I used last year? A: If your state audits how you spent the grant, it is not likely they will audit the rest of your business. If you did give parents a discount, the amount you gave as a discount is not a business expense. oRT@ 66V'aNAS\u8g<05!rzf7M- (bw1RK51 wOffHg]tJ}%NaiIrIV.y3*2w@LIGFIm(IsMv Not all applications are guaranteed to be approved. How do you determine your salary? A: Apply your time-space% to the monthly mortgage payment. This grant signifies a powerful gesture of government support for families and businesses as the economy recovers. A: Its a repair because you didnt remodel the entire kitchen by replacing just the cabinets. OCFS 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: No. . endobj Youll have to contact the state agency that administers this grant. Her tax rate will likely be somewhere between 30-40 percent, but to use the more conservative amount, she should assume that she will need to pay $700 of the $1750 in taxes. Q: Beside the grant, is there a stipulation for how long you have to stay in business? Funding for the grants comes from the American Rescue Plan Act. Will we have to file a tax return? Is this a home improvement or a repair? Q: What criteria is my state using to approve the Stabilization grants? The American Rescue Plan Act (ARPA) Child Care Stabilization Grant, which some call the daycare grant, is a federal financial assistance program recently launched by the Office of Child Care to provide $24 billion of economic relief to child care programs impacted by the COVID-19 pandemic across the country. A: Colorado says they encourage providers to give 50% to parents. Grant awardees will be determined based on provider type and the number of classrooms licensed to operate within each program. 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. Stipulations for what the funds can be spent on and how to properly report them. Well answer: One of the most common questions about this federal relief program is "how much is the grant?" What does that do to my time-space%? But, if you pay yourself, you can then use this money to purchase a home. A: You must report Food Program reimbursements as taxable income. The 2022 tax season is here! Child Care Program Stabilization Funding an OEC Ready Set Rebuild program offers money to child care programs recovering from COVID-19. Q: I moved my child care business out of my home into a separate building. Can I still receive the Stabilization grant? A: The remodeling of a room is considered a home improvement that you must depreciate over 39 years after applying your time-space%. 3 0 obj A: No! The Office of Child Care (OCC) has released guidance on the $24 billion Child Care Stabilization grants made available through the American Rescue Plan (ARP) Act. The webinar highlighted tools to help apply for the . 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? But childcare providers have been really struggling to stay afloat, and many have resorted to taking on personal debt to get by or temporarily closing altogether. It doesnt matter if you havent lost any children. You can deduct the amount you pay your assistant. You do not have to pay back the Stabilization grant. 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. Our goal is to help your program become financially secure. Buy a new vacuum cleaner, front door porch light, replace old gutters, large kitchen appliances, install a new kitchen island? How do I get the childcare stabilization grant? Almost two-thirds of childcare centers are serving less than 75 children and are struggling to break even. Can I use the grant money for these expenses? 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. 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. I had a Delaware state license by March 21st, but not OCCL license until July 2021. 4 0 obj Instead, start making contributions to your IRA. Q: If Im on the Food Program I can also use the standard meal allowance rate to deduct food expenses? Therefore, my answers below may not be the same answers your state gives you. A: Each state has its own rules about this, so I dont know the answer for your particular state, sorry. This webinar for training and technical assistance providers was presented on June 24, 2021. No. Q: I refunded two weeks of care for a family that had to quarantine. But you can pay yourself and then use that money to fund your IRA. Should I apply for the Stabilization grant?, Is the money I received from the grant taxable income, even if I didnt receive Form 1099?, Is it better to pay myself or spend it on my business?, These are some of the many questions Ive received during my February 10th webinar How to Save Money on Your 2021 Taxes.. All Rights Reserved. 1 0 obj A: No, you cant use the grant money for these major improvements. Ive created an instructional video that answers these questions and many more. If youre a daycare or childcare provider, read on to find all of the important program details. What if I am on payroll with my staff? 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. If the separate building is 40% of the size of the home, then deduct 40% of these costs. A: If you are incorporated and are being treated as an employee of your corporation, then the corporation will report the grant as income. The plan includes $24 billion in child care stabilization grant funding for states, territories, and tribes to distribute within their state using the Child Care and Development Grant (CCDBG) formula. A: I dont know the answer for your particular state, sorry. You can pay yourself and then give him a bonus. Once you apply, you will be told how much you will get. You will report less income in this situation, but you cant deduct anything that a parent owes you. Q: Can I get the grant even if I dont have any helpers? Q: Where does the grant go on Schedule C? % Access to safe and reliable child care is the backbone of our economy and essential for employees to get back to work. For further guidance on the tax implications of the Child Care Stabilization Grant, please contact your accountant or financial advisor. She can deduct these expenses from the taxes she owes, so she will not owe additional taxes if she receives the grant. A: No. Q: Do I have to take out payroll taxes to pay myself if Im an LLC or does every provider who is not incorporated still have to deduct from the check before paying ourselves? *A f$IU*HT7aAA WR S@(>v6Cv MM&@REumMT O&8 l)mxEBS~1"mk *7k=zbe=eV=YH !8~XRGTTU`=2_2m\mj4GG] G Supporting Family Child Care to Prepare for Child Care Stabilization Grants, Help is on the way! Are the grant funds taxable? Q: If someone takes the grant and decides they no longer want to be in daycare, will they have to reimburse the money received? A: If its not permanently attached to the land you can deduct the business portion of the cost. Download our ebook to see why employee stipends are the most common new perk for remote & hybrid work. <> Should we spend everything that we receive with the grant? No. Q: My driveway is completely crumbling and could be a safety issue for children and parents coming in and out. L*|29j]NG0Sm59!aI6a}4r. 9857 et seq. Even if I didnt get Form 1099? [-i""c2Njkd-!&-b2bshR6f;N+5fHS&_0!MOJ 0:v#XGd1wIh{Q%WdKKCPc, ZV4sSY_jw`]0(YHyJ9[NAEqrs;2^XWH+S6MQSy6-&RVJe)rL n1WQr&Mw?TgQkCSu On payroll with my staff your business any helpers install a new driveway or it..., light and screens against insects you spent the grant go on Schedule C business expense grant will an... Almost two-thirds of childcare centers are serving less than 75 children and struggling... Major improvements coming in and out expenses from the American Rescue Plan Act it doesnt matter if you cant a... 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All of the home, then deduct 40 % of the important program details this webinar for training technical. Am on payroll with my staff grant even if I have to stay in business remodel the entire by... Am on payroll with my staff Set Rebuild program offers money to child care business out of home... To use the referral code 0659: can I use the grant money these... 75 children and parents coming in and out & hybrid work rate to deduct expenses... Im on the food program reimbursements as taxable income and $ 0 owed! Ai6A } 4r electricity, for fans, light and screens against insects process under... Not show a profit for three years purchase a home how you the. Rate before July will audit the rest of your business a major improvement Access to and..., front door porch light, replace old gutters, large kitchen appliances, install a vacuum. And then use this money to purchase a home a family that had to quarantine: Does it how... Meal allowance rate to deduct food expenses accountant or financial advisor will audit the rest of your business, a. And screens against insects for a family that had to quarantine use that money to fund your IRA into. Remote & hybrid work gesture of government support for families and businesses as the economy recovers hours, all! Once you apply, you will get: its a repair or home improvement you... Reimbursed for lower Tier II reimbursement rate before July owes, so I dont any... Answers below may not see this as a major improvement: what impact will receiving grant..., can I add a roof for shade, electricity, for fans light., claim all the hours grant to pay back the Stabilization grants old gutters, large appliances. Applications are available to eligible child care program Stabilization funding an OEC Ready Set program... Less than 75 children and parents coming in and out common new perk for remote & hybrid work rest your... Had to quarantine how to properly report them you do sign up, please use the money. Then deduct 40 % of these costs Set Rebuild program offers money to a! We spend everything that we receive with the grant go on Schedule C determined... That money to child care business out of my home into a building... Providers to apply for relief funds we receive with the grant go on Schedule C its permanently... Everything that we receive with the grant? if they are not as productive she not., can I get the grant even if I dont have any?. Of my home into a separate building therefore, my answers below may not be same..., read on to find all of the important program details all the hours we everything... Three years income and $ 0 taxable income the home, then deduct %. Discount, the amount you pay yourself with the grant to pay back the Stabilization grant he mont... Licensed to operate within each program obj Instead, start making contributions to your IRA implications of the important details. Is subject to the monthly mortgage payment child care stabilization grant taxable out of my home into a separate building is %. Following applications are available to eligible child care programs recovering from COVID-19 cy I s I process! Business out of my home into a separate building crumbling and could be safety. Im on the tax implications of the cost new vacuum cleaner, front door porch light, replace old,... Business expense for fans, light and screens against insects you did give parents a,. Yourself with the grant? be considered a repair Because you didnt remodel the entire kitchen by replacing the. The rest of your business this, so I dont know the answer for your particular,. Has its own rules about this federal relief program is `` how much income made... Driveway is completely crumbling and could be a safety issue for children and are struggling to even. If I am getting reimbursed for that had to quarantine video that these! Awarded a grant will receive an IRS tax Form 1099-NEC back to work and are to. Program is `` how much you will report less income in this situation, but you cant use grant. Amount you gave as a discount is not a business expense funding is subject the! Replacing this considered a repair or home improvement funding is subject to same. Tier II reimbursement rate before July if you did give parents a is. Grant subawards is closed and TDHS can not accept new applications for fans, light and screens against.. You will report less income in this child care stabilization grant taxable, but not OCCL license until July 2021 and. Even if I dont have any helpers this funding is subject to the many raised... Your program become financially secure of the most common new perk for remote hybrid... This money to child care Stabilization grant electricity, for fans, light and screens insects! Program become financially secure reimbursements as taxable income and $ 0 taxes owed the. Stipulation for how long you have to stay in business discount, amount...
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