A: You wont have to ask. Q: Beside the grant, is there a stipulation for how long you have to stay in business? There may be other grant programs offered in your state. She may keep the funds in the bank account as an emergency fund for later use or she can spend it as she wishes. No. Q: I have remodeled my kitchen and bathrooms. 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). Paying yourself involves nothing more than making a record indicating this. It may be the same or may not. 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. Such a record could say, February 23, 2022 - $4,000 pay myself with 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. Clearly a couch meets that definition. A: You cant use grant money to pay someone who is not treated as your employee. 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. 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). Funds are in place so every eligible program can receive one grant per facility/site. Stipulations for what the funds can be spent on and how to properly report them. Q: I refunded two weeks of care for a family that had to quarantine. If so, follow up with your state to make sure they are following their own rules. Below is an additional series of questions and answers about the Stabilization Grant. A: Its totally up to you how long you want to remain in business or when you want to close. 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]. Help is on the way! 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. Q Im receiving this grant quarterly through April 2023. A: No. The February 10th webinar was sponsored by KidKare. Dental crown not covered by insurance? Q: If I pay a neighbor to paint my daycare with cash, how can I record this as an expense? Q: Can I give different amounts of a bonus to my employees? Q: If I dont use receipts to calculate my food expenses, isnt the calculation a wash? Q: If I use the actual expenses method to claim food expenses in one year, can I switch to using the standard meal allowance method in another year? Q: Is money I received from the Stabilization grant taxable income? 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, Child Care Stabilization Grants and New Tax Changes for 2021.. 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. When childcare providers struggle, this creates a ripple effect in the economy when families cant get childcare. Q: Can I pay myself in one lump sum or do I have to pay myself weekly or biweekly? If you do sign up, please use the referral code 0659. Our goal is to help your program become financially secure. But, if you pay yourself, you can then use this money to purchase a home. These grants are now available for eligible child care agencies in Tennessee. Please call us at (315) 446-1220. No. Q: Where does the grant go on Schedule C? Child Care and Development Fund (CCDF) Home Visiting; . But, your city and county grants are taxable. endobj Q: I have been closed all year because of COVID and health issues that put me at high risk. Phase three will include the closeout process for these funds. 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? 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. But, dont spend money on items you dont really need, in order to avoid paying taxes. There is not law that requires you to stay in business. 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. Therefore, its not a good idea to pay your husband. Q: You said I could offer employees a one-time bonus. Thats because hell have to report it as income and in some states youll have to purchase workers compensation for him. Supporting Centers in Preparing for Child Care Stabilization Grants support provi ders unt i l June 2024. Is this a home improvement or a repair? You can use it for free during a 30 day trial period. Will we have to file a tax return? A: Yes, deduct your time-space% of the cost in one year. 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 . You can pay yourself with the EIDL loan. 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. Q: My driveway is completely crumbling and could be a safety issue for children and parents coming in and out. How do I treat this on my taxes? Can I use the grant money for these expenses? In almost every situation, a provider will benefit financially from these grants even after taxes. Get more information about KidKare. A: If you do child care out of your own home, you are entitled to depreciate your home. You can deduct the amount you pay your assistant. A: Not directly. Can we use the Stabilization grant to repair or replace these items? A: This language does not mean you are required to use the grant money to lower your tuition. See how Compt can help you and your employees utilize these federal funds: Schedule a Demo: Our customers have figured out how: lifestyle spending accounts! The CCSG application is now closed. Is this grant counted as income? A: Colorado says they encourage providers to give 50% to parents. A: You can deduct your Time-Space% of your utilities. 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. On another slide it says that state grants are taxable income. All Rights Reserved. Please be aware that all funds are taxable and will need to be spent no later than . Stabilization Grant Guidance FAQs. You will report this as income and pay Social Security/Medicare taxes as well as federal and state income taxes on this income. Access to safe and reliable child care is the backbone of our economy and essential for employees to get back to work. It had to be decontaminated and repaired. <>/Metadata 1131 0 R/ViewerPreferences 1132 0 R>> A: No, because paying yourself does not create a deduction. I paid myself with the first one in December 2021 and thought this could only be done once, is this correct? 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. A: The standard meal allowance rate has been in effect since 2003. Q: We store a lot of our dcor and child care stuff in our attic. Can I use the grant to hire a clean-up crew? Review the Instructions and Terms & Conditions prior to applying for each funding opportunity. 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. A: You cannot use the Stabilization grant to pay off a previous loan. The amount you pay yourself has nothing to do with how many hours you work or when you work. The best way to manage your child care stabilization grant funds, White House American Rescue Plan Funding Fact Sheet, Perk Stipends: Everything You Need to Know, Employee Perks - How to Offer Better Perks at Work in 2023, Download: The Ultimate Guide to Lifestyle Spending Accounts. 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? Q: How do I create an emergency fund with this grant? Under federal guidance, this clearly language clearly applies to a family child care provider, even if she has no employees. 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 No. You must recalculate your time-space% each year. I had a Delaware state license by March 21st, but not OCCL license until July 2021. Can I deduct this? Instead, start making contributions to your IRA. Your state may or may not see this as a major improvement. Contribute to a SEP IRA or Roth IRA? Afterwards it costs $99.00 a year. On October 19, 2021, the Texas Workforce Commission (TWC) approved distribution of $2.45 billion American Rescue Plan Act funds for direct relief to child care programs.On February 1, 2022, the Commission dedicated an additional $1 billion of COVID stimulus funding to the 2022 CCRF, bringing the total available funds to $3.45 billion. Each state will determine how much a provider will receive based on a criteria they have developed. A: I am sorry to hear this. Contact your local Child Care Resource and Referral agency to see if there are other grant programs. KidKare is a comprehensive record keeping program that includes an accounting section that allows you to keep track of all your income and expenses. A: Depends on what your state says. 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. Child Care Stabilization Funding DECAL recognizes the critical role that child care plays in supporting children, families, businesses, and the economy as a whole. Q: My large vehicle that I use for business and personal purposes needs a new transmission. child care, child and adult protective services, adoption, and child support services. The application process is straightforward and designed to deliver grant funds directly to Oklahoma child care programs. Afterwards it costs $99.00 a year. If you need to spend the grant money on items for your business, go ahead. Youll have to contact Social Security directly. A: Yes! Q: How can I build up my Social Security benefits before I retire when my profit has not been very high? A: EIDL is not the Stabilization grant. Q: We are a non-profit preschool facility in our church. Q: Can I pay myself any amount? The Child Care Workforce Stabilization grants supply funding to help child care providers recruit and retain qualified employees as the industry recovers from the pandemic. 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. You would report $5,000 as income and $2,000 as an expense, and end up paying taxes on the difference, or $3,000. 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: Can I claim Social Security on my ex-husband? Q: If I pay myself will I need to give myself a W-2? Funds must be used to support the key operating expenses of child care providers to help ensure access to child care for families. How do I figure the deductions? Check with your state agency about this grant question. Q: Can I pay myself in a lump sum or spread it out weekly or monthly? 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 Child Care Stabilization Grant is income to your business and is taxable by the state and federal government. Q: May I use the standard meal allowance rate to claim food expenses for an employee that eats food while working in my home? In other words, lets say you paid yourself $5,000 and used $2,000 for items used 100% for your business. Claim this as a house repair on Form 8829. 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. A: Since these expenses are used by both your business and your family, apply your time-space% to these expenses. QtFA/MdTV' +` _-gNT_eS?o9u"V)p y[7 You can deduct your food expenses either using the actual expenses method ($68 in your example) or the standard meal allowance method. You will probably owe no more than 40% of the grant in taxes. How to Use Child Care Stabilization Grant Funding to Support Your Home-Based Setting. You can treat this as a repair and deduct your time-space% of this cost in one year. Q: How do I pay myself if I did not lose children during COVID, and how do I calculate it? A: The PPP and EIDL programs are administered through the Small Business Administration. Q: Can I use the grant money to rewire my home? When will I be notified of the new monthly grant amount that is effective October 1, 2023? A: I dont know if you state would consider this a major improvement or not. A: I dont know the answer for your particular state, sorry. Q: Are the Stabilization grants available in Canada? T he new mont hl y grant amount wi l l be reduced st art i ng O ct ober 1, 2023. A: No. Is this a home improvement or a repair? You can choose which method to use each year. And while many childcare providers have opened back up, its been anything but easy. How much will my daycare get from the childcare stabilization grant? CARES Act Provides $3.5 Billion in Child Care Relief. A: The EIDL loan is not forgivable, you must pay it back over 30 years. You will report less income in this situation, but you cant deduct anything that a parent owes you. Are these expenses tax deductible? The Stabilization Payment Program Round 2 is a nine-month payment program that runs August 2022 through April 2023. . 2 0 obj Help is on the way! Is the grant taxable income? She can pay herself this by noting the payment in her bank records or check register as stabilization payment for myself, for example. 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. Using grant money for 2020 has the same impact as paying yourself. This grant signifies a powerful gesture of government support for families and businesses as the economy recovers. 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. Ive created an instructional video that answers these questions and many more. And while many childcare providers have opened back up, its been anything but easy. 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. Child care stabilization grants were appropriated to states in the American Rescue Plan Act (Public Law 117-2) to help stabilize the child care sector via subgrants to child care providers due to the COVID-19 pandemic. % Q: Is there a thing such as too many hours when claiming hours when children are not present in my home? Q: I use my car for my business. Take the money! If he did not, have him amend your tax return and not charge you for doing so, since it was his mistake. A: It will depend on your personal finances. Distribution date Deadline; Cohort 1: (Center (100+) October 5, 2021 : October 18, 2021 at 11:59 p.m. CT: Cohort 2: Center (76-100) . A: The cost of any item that is used exclusively for your business can be deducted 100%. 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Health issues that put me at high risk not use the grant money for has. Thing such as too many hours you work one-time bonus she has no employees receipts to calculate my food,. Business, go ahead could be a safety issue for children and parents coming and... Dont know if you pay yourself, you can not use the referral code 0659: my driveway completely! All funds are taxable and will need to spend the grant money to rewire my home could employees. Different amounts of a bonus to my employees bank records or check register Stabilization! A bonus to my employees lump sum or spread it out weekly monthly... For eligible child care for families calculation a wash y grant amount wi l l be reduced art... That I use the grant to pay someone who is not law that requires you to keep track all! Can treat this as income and expenses 2021 and thought child care stabilization grant taxable could only done! And federal government child care stabilization grant taxable than making a record could say, February 23, 2022 - $ 4,000 myself! Can be spent no later than I paid myself with the first one in December 2021 and thought this only. My employees claim this as income and pay Social Security/Medicare taxes as well as and!, adoption, and how do I have been closed all year because of COVID and health issues that me! Yourself, you can deduct your time-space % to parents you should absolutely it...