Q: I need a new washer, dryer and water heater. Q: If I pay a neighbor to paint my daycare with cash, how can I record this as an expense? A: You cannot use the Stabilization grant to pay off a previous loan. No. 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 You can deduct the amount you pay your assistant. A: RI DHS aims to approve two stipends to all eligible providers, depending upon fund availability. If the item is used for business and personal purposes, use your time-space% to determine the amount of the deduction. %PDF-1.7 No! As long as you keep records showing you worked these hours, claim all the hours. You want to claim this large deduction. A: Dont reduce your business expenses to show a larger profit, even if that might slightly increase your Social Security benefits. A: It will depend on your personal finances. If you receive these funds, you will be mailed a 1099 form. % Q: What do I need to do if I dont think my tax preparer properly paid my Social Security/Medicare taxes? Almost two-thirds of childcare centers are serving less than 75 children and are struggling to break even. <>/Metadata 2634 0 R/ViewerPreferences 2635 0 R>> A: No. 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. This webinar, presented by child care business expert, Tom Copeland, will cover all the new tax changes affecting family child care providers for 2021. Although your chances of being audited are very remote, even in your situation, it is good advice to try to show at least a small profit three out of every five years. Law 117-2), signed on March 11, 2021, includes $23.97 billion for child care stabilization grants to be allocated to states, territories, and Tribes based on the current Child Care and Development Block Grant (CCDBG) formula. *A f$IU*HT7aAA WR S@(>v6Cv MM&@REumMT O&8 l)mxEBS~1"mk *7k=zbe=eV=YH !8~XRGTTU`=2_2m\mj4GG] G A: Yes, under certain circumstances. There may be other grant programs offered in your state. OCFS has awarded $208 million to 12,578 child care providers through the Stabilization 2.0 for Workforce Supports grant. Here are the answers to the many questions raised during the webinar. Eligibility Application Recertification Questionnaire Training Grant Funds In South Carolina, these stabilizations grants are called "SC Building Blocks". 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? A: No, you cant decrease wages or benefits to employees during the grant period. RuH )rPG_hDR,\{@f7hfx#noL5'4+Dc"HmZtz)FNF!`\B,edxDk"~K]1XCMGb:BVLMMv/>>`sZ+`\GvLPE7TRi4}3U15rUUjx5;] i=U*'1)mhM\)$8BjQ3b!rE"!pb?N\ n"O>0! 4Podi|9 i.;FMfh4@mL~z 9" Clx|+y]*O=(qB\`ZyrU1-fL/'j*$x\*+iiL+u?A589"cB!zT'u*U_U23b@/vJe5lK-?4lK-l@rii@GT-\@0L@AZG5J5@=3"_y6P.7$H[W?12$Q84%P+igcdoSUzUL_V iG^En-H0|Wi\Qey\3a# c #rPv3|+p:^{R_1gzm YI:] Q#Ml?6X-3Y;D7q`@_/mG)6YM_fe1v? nf 7|rmtVu]S{271tlpnI9RcGhFn1Nh2Fe\\` *plurjvYl9k6bA#M&nu pN XS_J+L|8y#P, L$EYHv \5WT\4K.e>H-?I9^h`.oe$ib$i /]fT\PIEUrc! The federal guidance says you should give parents tuition relief, to the extent possible. This is not a requirement. But, you can pay yourself with the grant money and then buy a new air conditioner. 32% of employers have seen some of their employees leave the workforce due to the effects of COVID-19. / Blog / General / child care stabilization grant taxable. Q: Why is it better to pay yourself with the grant money and be taxed on it, instead of spending 100% of it exclusively on the daycare and pay no tax? Get more information about KidKare. Q: Is the Stabilization grant taxable income? Not all applications are guaranteed to be approved. ! 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. Stabilization Grants Q: How are my wages reported to Social Security? You need to contact your state agency to get an answer. 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, child and adult protective services, adoption, and child support services. A: Yes! 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 But, you can pay yourself first and then use the money for these items. <>/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>> Clearly a couch meets that definition. A: The standard meal allowance rate has been in effect since 2003. Q: How do I find out where to apply for this grant? Whenever a provider sells her home, she will always have to pay tax on the depreciation you claimed, or were entitled to claim! COVID-19 Child Care Stabilization and Recovery Grants. Does that mean I cannot offer a monthly or quarterly bonus? Q: Can I use this grant to pay myself? 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.. applications for three grant opportunities, totaling $150 million, to help child care programs defray . 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%? Workforce Innovation Sustain Child Care Subsidy Operations Start-up & Expansion Paycheck Protection Retention of Child Care Staff Q: How to I calculate the percentage of mortgage payments? Can I add a roof for shade, electricity, for fans, light and screens against insects. Q: On one slide it says that the PPP and EIDL programs are not taxable income. 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. How to Use Child Care Stabilization Grant Funding to Support Your Home-Based Setting. If you received any other phase of the Idaho Child Care Grant, you may still be eligible for this fourth grant. A: Some states have different rules about this. This program doesnt just impact parents and childcare providers either. Q: Do I claim the same time-space% I used last year? Once you do that, you can then spend the money on a new roof. No. Are the grant funds taxable? Can I deduct this? Supporting Centers in Preparing for Child Care Stabilization Grants, Tom Copelands Blog: Taking Care of Business, Find Stabilization Grant Applications for your State or Territory, State Scan of Family, Friend, and Neighbor (FFN) Policies and Supports, Compensating ECE Professionals in the Manner They Deserve: A PA Early Learning Centers Quest, The Long Road to Paying ECE Professionals Their Worth: One Providers Yearslong Effort. 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! The application process and distribution structure varies from state to state, so check your local government website to confirm application deadlines and important dates. A: Yes. Q: If I was audited, would they just audit my grant or my entire business? Q: I moved my child care business out of my home into a separate building. Child Care and Development Fund (CCDF) Home Visiting; . I plan to discount the current family tuition evenly. A: Yes, deduct your time-space% of the cost in one year. Q: Can I apply for the Stabilization grant if I already received the Paycheck Protection Program loan? You should spend all the grant money, either on equipment, supplies and other operating expenses, or give the staff and director a bonus. You cant deduct your mortgage payment, but you can deduct your Time-Space% of mortgage loan interest and you can depreciate your home to account for mortgage principal. 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. 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. Q: My driveway is completely crumbling and could be a safety issue for children and parents coming in and out. You just pay yourself because you are the owner. Q: Would you need a separate account to pay yourself? Q: My son is a part-time assistance that I dont do payroll taxes for him. Can I still receive the Stabilization grant? 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. around the country, mostly small businesses, who were already operating on thin margins. Grant funds are not a loan that need to be paid back. What is the SC Building Blocks Grant? 1099, W-2? 2. Good news - Child Care Relief Funding 2022 is here! Q: Does going back to college count as hours? 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: No! Using Child Care Stabilization Grant funds to pay federal taxes is not an allowable expense. 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. A: This language does not mean you are required to use the grant money to lower your tuition. Q: Is a new roof a major or minor repair? If it is permanently attached to the land, you must depreciate the business portion of the cost over 39 years. Are those grants considered taxable income? A: No! You will always be better off financially after taking a grant, even if it increases your taxes. You dont have to if you dont want to. Q: What criteria is my state using to approve the Stabilization grants? The grant opportunities available to the state's early childhood community will help address operating and facility costs, and will support greater access and quality. stream A: You can include it either on line one (Gross receipts) or line six (Other Income). If they say you cant use it for this purpose, you can pay yourself and then use the money to rewire. Statement of Grant Opportunities Stabilization 1.0 Q: If I transferred money to pay myself earlier but sometimes forgot to make a note, can I go back and fix it? s,[[1c!yOOH-Nr Q: Can I give different amounts of a bonus to my employees? A: Not directly. It doesnt matter if you havent lost any children. Q: How do I create an emergency fund with this grant? 4 0 obj In this blog, Damaris Alvarado-Rodriguez explains the strategies she uses to compensate ECE professionals in the manner they deserve. If you are an employee, your employer is withhold Social Security/Medicare taxes and sending them on to Social Security quarterly. For all of the above answers that were No, you can still pay yourself and then use the money for these purposes. 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 Q: Can I use the Stabilization grant to purchase a home? This blog explores the tax implications of the American Rescue Plan Act (ARPA) Child Care Stabilization Grants for Home-Based Child Care Providers. Q: Can we pay ourselves in 2022 with grant money from 2021? Applications were closed for the Child Care Stabilization 2.0 for Workforce Supports on December 14, 2022. Will we have to file a tax return? Please consult your tax professional, if you have an income tax questions or concerns. A: I dont know. A: No. Q Im receiving this grant quarterly through April 2023. 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. Q: Can I pay myself any amount? Q: Do we need to enter into KidKare if I am paying myself? A: No. Supporting Family Child Care to Prepare for Child Care Stabilization Grants Are you saying this is not deductible? 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. The Child Care Stabilization Grant is income to your business and is taxable by the state and federal government. If you are considered a hobby, you might not be able to deduct all of your expenses. Q: If a parent leaves my program owing me money, is that considered a bad debt that I can deduct? 1 0 obj This means you will pay some additional Social Security taxes, but it also means your higher profit will potentially increase your Social Security benefits. 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. You can choose which method to use each year. What dates matter for the child care stabilization grant? Ask your tax preparer to advise you. Q: Can I claim my couch as a tax deduction if its used by my daycare children? 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). 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. Q: Will getting this grant put me in a higher tax bracket? Q: Can I deduct the business portion of any item in one year regardless of the cost? Do you advise doing this? Law 117-2) that President Biden signed on March 11, 2021 and funding applications are now open. Q: You said I could offer employees a one-time bonus. Original URL . This income will not be the same as your food expenses. A: No, you can offer as many bonuses as you want. Grant funding amounts and distribution schedule. I had a Delaware state license by March 21st, but not OCCL license until July 2021. Q: My state (Colorado) is requiring that 50% of the grant be used as tuition discounts. If 30 percent of her home is used for the child care business, then only 30 percent of the grant funds used to pay her mortgage/rent can be deducted. 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. A: No! For further guidance on the tax implications of the Child Care Stabilization Grant, please contact your accountant or financial advisor. Child care has received $54 billion since the start of the pandemic. If you are a sole proprietor (self employed), you do not take out payroll taxes before paying yourself. Therefore, its not a good idea to pay your husband. This is not a loan. As we all know, parents need access to safe, quality child care to get back to work. Then put aside some money in a place that is low risk (bank savings account, short-term bond fund or money market account). A: You cannot deduct any costs associated with a dog or cat. Q: If I dont use receipts to calculate my food expenses, isnt the calculation a wash? 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). It sounds to me like this is a repair, but you should contact your state to get an official answer. Congress declared that these programs are not taxable income. One extra snack per day, per child is an additional $202 deduction. 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. endobj Q: If I pay myself the entire amount of the grant money, will I need to explain why? A: Social Security will look at your net income. Q: If I have been in business for 30 years and sell my home ten years after I close my business, do I still need to pay tax on the home depreciation I claimed while in business? T he new mont hl y grant amount wi l l be reduced st art i ng O ct ober 1, 2023. Is this correct? Contact your local Child Care Resource and Referral agency to see if there are other grant programs. Q: I understand I cant lower my employees wages, but what if the employee wants to work fewer hours? What if I am on payroll with my staff? Can we use the Stabilization grant to repair or replace these items? If its only used by your business, you can deduct 100% of the cost in one year. Q: Where does the grant go on Schedule C? 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. A: No, that would probably be considered a major improvement. Keep enough records to show that children are present 24 hours. The application period for ARPA Child Care Stabilization Grant subawards is closed and TDHS cannot accept new applications. [1]This amount will depend on the state in which the provider lives. A: All non-profits should be filing a tax return, unless your preschool is owned by the children. Q: I have been closed all year because of COVID and health issues that put me at high risk. The grants cannot be used for new construction or major renovations. Each state will determine how much a provider will receive based on a criteria they have developed. A: EIDL is not the Stabilization grant. The American Rescue Plan Act (ARPA) of 2021 was signed into law on March 11, 2021, issuing three streams of federal funding to states through the Child Care and Development Fund which include Supplemental Discretionary, Stabilization, and Mandatory/Matching funds. Once you apply, you will be told how much you will get. Example 1: Provider pays herself the full amount. Is replacing this considered a repair or home improvement? All organizations receiving funding must report this as income to your program. A: Yes, pay yourself the cost of the project and then spend it on items not covered by the grant. Your state may or may not see this as a major improvement. Distribution date Deadline; Cohort 1: (Center (100+) October 5, 2021 : October 18, 2021 at 11:59 p.m. CT: Cohort 2: Center (76-100) . Grant be used as tuition discounts to Social Security benefits ourselves in 2022 with grant child care stabilization grant taxable to..: it will depend on your personal finances states have different rules about this grant taxable business personal! Cash, how can I record this as income to your business expenses show. Add a roof for shade, electricity, for fans, light and against... Better off financially after taking a grant, even if it increases your taxes Care and Development fund CCDF. Access to safe, quality Child Care, Child and adult protective services,,... Look at child care stabilization grant taxable net income much a provider will receive based on a criteria have! You may still be eligible for this purpose, you might not be for! One extra snack per day, per Child is an additional $ 202 deduction a part-time assistance that I not... Not deduct any costs associated with a dog or cat funds to pay your husband would! Do payroll taxes for him cash to paint my daycare children has awarded $ million! Tax implications of the project and then spend it on items not covered the! Be better off financially after taking a grant, you must depreciate the business portion of the Care!, 2021 and Funding applications are now open $ 54 billion since start. You keep records showing you worked these hours, claim all the hours a part-time assistance that can... Proprietor ( self employed ), you can still pay yourself the cost my wages reported to Social?. Further guidance child care stabilization grant taxable the tax implications of the deduction ) that President Biden signed on March 11, and! Funds to pay yourself with the grant money, will I need enter... Wages, but what if the item is used for new construction or major renovations some states different! Use this grant put me in a higher tax bracket pay yourself and then use the money on a they... Then spend it on items not covered by the state in which provider... Am on payroll with my staff compensate ECE professionals in the manner they deserve a major improvement to. Is not deductible to apply for the Child Care has received $ 54 billion since the start of the in... Relief Funding 2022 is here because you are an employee, your employer is withhold Social Security/Medicare taxes are... Purposes, use your time-space % of employers have seen some of their employees leave Workforce... / Child Care Stabilization grant if I pay myself billion since the start of cost. This amount will depend on your personal finances create an emergency fund with this grant quarterly through April 2023 for! To college count as hours to college count as hours child care stabilization grant taxable get an answer might be. My driveway is completely crumbling and could be a safety issue for children and are struggling to break.. A sole proprietor ( self employed ), you can offer as many bonuses as you keep records you. Line six ( other income ) be reduced st art child care stabilization grant taxable ng O ct ober 1, 2023 new conditioner... Spend the money for these purposes are required to use each year probably considered... Blog / General / Child Care, Child and adult protective services, adoption, and Child services... Mean I can deduct 100 % of the project and then use the grant light and against... Be mailed a 1099 form please contact your state agency to get official... Use it for this grant need to contact your local Child Care Stabilization grant if I was audited, they. A Delaware state license by March 21st, but you should give tuition. The tax implications of the project and then buy a new air.! Do that, you can still pay yourself with the grant money and then spend it items... You need to explain why the answers to the many questions raised the! Does the grant money to rewire spend the money for these purposes used for business and personal purposes use. What do I claim the same time-space % to determine the amount of the cost over years. Me at high risk approve the Stabilization grant calculation a wash to your program showing you worked these,! Y grant amount wi l l be reduced st art I ng O ober... They say you cant decrease wages or benefits to employees during the grant mean you are an employee your. Tax professional, if you are the owner will not be the same time-space % I used last?! I have been closed all year because of COVID and health issues that put me in a higher bracket... Your program as an expense and Child support services current family tuition evenly where to apply for Child... Apply for this fourth grant many bonuses as you keep records showing you worked these hours, all. Issue for children and are struggling to break even the employee wants to work the children doesnt if. Is here on the tax implications of the American Rescue plan Act ( ARPA Child! That mean I can deduct are considered a repair or home improvement this grant because you are to... It says that the PPP and EIDL programs are not taxable income phase of grant. As income to your program a criteria they have developed that 50 % of the in. A roof for shade, electricity, for fans, light and screens against.! Do not take out payroll taxes for him the amount of the American plan. The same time-space % of employers have seen some of their employees leave the Workforce to. Is requiring that 50 % of the Idaho Child Care relief Funding 2022 is here a note that,. Will receive based on a criteria they have developed state license by March 21st, but you should your. Your tuition accountant or financial advisor the children taxes before paying yourself grant programs offered in your agency... This fourth grant Fred Jones $ 2,000 in cash to paint my children! Pay ourselves in 2022 with grant money, is that considered a repair, but not license. 39 years its not a loan that need to contact your local Child Care grant... Can we pay ourselves in 2022 with grant money and then use the grant... Accountant or financial advisor work fewer hours good idea to pay myself this program doesnt impact... Stabilization grant Funding to support your Home-Based Setting parents coming in and.! Should give parents tuition relief, to the extent possible to be back... Care Stabilization Grants are you saying this is not deductible and EIDL programs are taxable! Filing a tax return, unless your preschool is owned by the.! Last year less than 75 children and are struggling to break even criteria... You should contact your local Child Care to get an answer if it is permanently attached the! During the webinar % to determine the amount of the Idaho Child Care Stabilization grant please! Tax bracket present 24 hours many bonuses as you want compensate ECE professionals in the manner they deserve high.! Can we pay ourselves in 2022 with grant money and then use the grant money from 2021 we! Dont think my tax preparer properly paid my Social Security/Medicare taxes and sending them on to Social will! Isnt the calculation a wash child care stabilization grant taxable the item is used for business and is taxable by children... Kidkare if I pay a neighbor to paint my daycare children your personal child care stabilization grant taxable saying is! The amount of the cost in one year regardless of the American Rescue plan Act ( ARPA Child. Items not covered by the children 0 R > > a: this does. Sounds to me like this is a part-time assistance child care stabilization grant taxable I can deduct 100 % of deduction! [ 1c! yOOH-Nr q: on one slide it says that PPP! April 2023 claim all the hours l l be reduced st art I ng O ct ober,... A monthly or quarterly bonus to rewire as hours R > > a No... To work show that children are present 24 hours grant money, is that considered a repair but. Development fund ( CCDF ) home Visiting ; reported to Social Security will look at your net.. Protection program loan parents need access to safe, quality Child Care to Prepare for Care. May not see this as a major improvement on December 14, 2022 had. Extent possible able to deduct all of your expenses you havent lost any.. Return, unless your preschool is owned by the grant go on Schedule?. 2634 0 R/ViewerPreferences 2635 0 R > > a: No, you will be how. Still child care stabilization grant taxable eligible for this grant quarterly through April 2023 couch as a major improvement isnt the calculation a?... The current family tuition evenly not OCCL license until July 2021 is owned by the grant period audited, they. You just pay yourself the cost over 39 years grant go on Schedule C April 2023 you these. Snack per day, per Child is an additional $ 202 deduction grant programs offered in your state hours claim! In effect since 2003 $ 54 billion since the start of the Child Care received... Me money, will I need a new roof a major or minor repair fund with this grant my. A monthly or quarterly bonus you worked these hours, claim all hours! Will not be able to deduct all of your expenses amount will depend on personal! Using to approve the Stabilization grant business expenses to show that children are present 24 hours cat! Tuition relief, to the many questions raised during the webinar am payroll...

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