Q: If I only have one child, can I still apply for the grant? Q: Has the standard meal allowance rules always been in place or is this a recent rule? Q: I am on the Food Program and I spent $100 a month for food, but am only paid $68 from the Food Program. Q: Can I use the Stabilization grant for: Pay my employees life insurance premiums? <>/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>> This is clearly the case if you were receiving the lower Tier II reimbursement rate before July. A: You can use the grant money for all of these items. A: If you are self employed, you are filing IRS Form 1040SE which calculates how much Social Security/Medicare tax you owe. 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. 9857 et seq. A: Yes, deduct the time-space% of this cost. The February 10th webinar was sponsored by KidKare. A: Yes, deduct your time-space% of the cost in one year. Should I pay myself first with the grant money and then make payments on the vehicle? Q: You said I could offer employees a one-time bonus. 32% of employers have seen some of their employees leave the workforce due to the effects of COVID-19. You would report $5,000 as income and $2,000 as an expense, and end up paying taxes on the difference, or $3,000. Q: I did not include the grant I got in 2020 on my 2020 tax return. Q: Does it matter how much income I made this year to use the Stabilization grant to pay myself? If it is permanently attached to the land, you must depreciate the business portion of the cost over 39 years. Stabilization Grants Q: What impact will receiving this grant have on my Social Security benefits? Is the Child Care Program Stabilization Funding taxable? Childcare isnt just a family issue, its a business issue. See the funding breakdown by state, tribe, and territory, and more information about the grant on the. KidKare is a comprehensive record keeping program that includes an accounting section that allows you to keep track of all your income and expenses. Get more information about KidKare. For example, a family child care home provider may use the grant to pay her mortgage or rent, but only the portion (percent of the square footage) of the home that is used for the business is tax deductible. Q: I bought flowers for the front yard and new patio blocks leading to the front door. Almost. One extra snack per day, per child is an additional $202 deduction. A: The standard meal allowance rate has been in effect since 2003. 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. Paying for weekly house cleaner? On July 23, 2021, the Legislature enacted the Child Care and Development Infrastructure Grant Program, detailed in Welfare and Institutions Code section 10310., a $250 million investment in the child care infrastructure across the State of California that is to be administered in the form of grants by the California Department of Social . How am I doing that? 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. Q: Can I claim Social Security on my ex-husband? Afterwards it costs $99.00 a year. 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. 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. If you dont spend it all you will have to return the unspent money. Child Care Grant: Phase 4. [1]This amount will depend on the state in which the provider lives. The Child Care Stabilization Grant (CCSG) Program sustains Arizona's child care network by giving a consistent, reliable funding source directly to child care providers to cover increased cost and challenges due to COVID-19 through June 2023. The Child Care Stabilization Grant is income to your business and is taxable by the state and federal government. Q: How to I calculate the percentage of mortgage payments? References: The Child Care and Development Block Grant (CCDBG) Act (42 U.S.C. There has never been this amount of federal funding dedicated to childcare providers, which makes this an incredible opportunity. Because you are on payroll, money you pay yourself has to go through your payroll and is subject to all payroll taxes. 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? A: No. 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. 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. Did this change? Is this deductible? 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. 9EJH-E*!PPRs&-L\1%gh7XXjZ/ Q: I need a new washer, dryer and water heater. 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. But, if you pay yourself, you can then use this money to purchase a home. I had a Delaware state license by March 21st, but not OCCL license until July 2021. Yes. Q: Can I use the grant to landscape my backyard to build a play set for the daycare? Not all applications are guaranteed to be approved. 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. 2023 BUILD Initiative. As long as you keep records showing you worked these hours, claim all the hours. OCFS has awarded $208 million to 12,578 child care providers through the Stabilization 2.0 for Workforce Supports grant. child care, child and adult protective services, adoption, and child support services. For further guidance on the tax implications of the Child Care Stabilization Grant, please contact your accountant or financial advisor. Yes, if you are a for-profit organization this funding is taxable. A: Yes. 1099, W-2? 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). All $20 million of the One-Time Supplemental Stabilization Grant funds was awarded in January 2022. You should spend all the grant money, either on equipment, supplies and other operating expenses, or give the staff and director a bonus. 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? This means you will pay some additional Social Security taxes, but it also means your higher profit will potentially increase your Social Security benefits. Some states have decided to be very lenient in how they distribute funds, some have a rigid set of regulations, and some have yet to decide how theyll give out these funds. / Blog / General / child care stabilization grant taxable. endobj Can I still deduct them as expenses? Are those grants considered taxable income? Ive created an instructional video that answers these questions and many more. I paid myself with the first one in December 2021 and thought this could only be done once, is this correct? No. In a recent webinar hosted by the Office of Child Care Technical Assistance Network, national family child care business expert Tom Copeland provided an overview of the stabilization grants and how family child care homes can handle the tax implications. Contact your local Child Care Resource and Referral agency to see if there are other grant programs. If so, follow up with your state to make sure they are following their own rules. 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! She can deduct these expenses from the taxes she owes, so she will not owe additional taxes if she receives the grant. This webinar, presented by child care business expert, Tom Copeland, will cover all the new tax changes affecting family child care providers for 2021. 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. Q: Can the playground used exclusively for my business be part of the space percentage? 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. This is unsustainable for many reasons. Download our ebook to see why employee stipends are the most common new perk for remote & hybrid work. Distributing the funds to employees (most states require a portion of grant funds to be paid out to employees)? A: Yes, you can pay yourself any amount. Child Care and Development Fund (CCDF) Home Visiting; . A: You report the grant as income. 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. 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. 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). Q: On one slide it says that the PPP and EIDL programs are not taxable income. Q: Can I apply for the Stabilization grant if I already received the Paycheck Protection Program loan? Can I reallocate some of this money so I dont have to pay income taxes? There may be other grant programs offered in your state. A: The EIDL loan is not forgivable, you must pay it back over 30 years. Subject: Child Care Stabilization Grants Appropriated in the American Rescue Plan (ARP) Act (Public Law 117-2) signed into law on March 11, 2021. endobj Paying yourself involves nothing more than making a record indicating this. Q: Can I pay myself in one lump sum or do I have to pay myself weekly or biweekly? A: Dont reduce your business expenses to show a larger profit, even if that might slightly increase your Social Security benefits. A: No! Eligibility Application Recertification Questionnaire Training Grant Funds A: The remodeling of a room is considered a home improvement that you must depreciate over 39 years after applying your time-space%. Once you do that, you can then spend the money on a new roof. 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? Is this correct? Here is the recording of my recent webinar, "Child Care Stabilization Grants and New Tax Changes for 2021." The webinar covered: The tax implications of the Stabilization Grants What expenses can be deducted in your business How to calculate your Time-Space% And more Here's a copy of the power point slides. The same answer would be for a patio or driveway or any outdoor play space. This is not a loan. You will only save a small amount of money on your taxes when hiring your husband. A: No, you cant use the grant money for these major improvements. In general, every licensed or regulated provider is eligible. A: No, because paying yourself does not create a deduction. 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. Regarding federal tax rules, please contact your tax preparer or the Internal Revenue Service for guidance. Child care has received $54 billion since the start of the pandemic. Or, will I need to show a loss? 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. Q: If my husbands is disabled and collects Social Security Disability Insurance, will it change to regular Social Security when he reaches age 70? YGF:JKSj"tZO+rR&e ]ii D I The purpose of the guidance is to help states quickly distribute the stabilizations funds to protect and support the existing child . Is the child care stabilization grant taxable? Q: If I am on payroll, can I still transfer money to my personal account to pay myself? Q: Does going back to college count as hours? You can pay yourself with the EIDL loan. It affects how we all work when we can work and for many, why we work. %PDF-1.7 If you are an employee, your employer is withhold Social Security/Medicare taxes and sending them on to Social Security quarterly. A: Its totally up to you how long you want to remain in business or when you want to close. <> Q: Do I claim the same time-space% I used last year? In that case the church is filing a tax return that includes your preschool. How to Use Child Care Stabilization Grant Funding to Support Your Home-Based Setting. A: Yes, a staff bonus must go through normal payroll, which means you are withholding payroll taxes in the same way as you process wages. A: An employee can work fewer hours and that wont impact the grant. Q: Can I deduct the business portion of any item in one year regardless of the cost? Can I give him a $500 bonus? If you just replaced the shingles this would probably be considered a minor repair. A: Pay yourself first. You can use it for free during a 30 day trial period. The webinar was sponsored by Early Childhood Investigations. You will then report your wages as income. Important note: Although there is federal guidance on how the Stabilization grants are to be administered, each state may interpret this guidance slightly differently. A: You cannot deduct any costs associated with a dog or cat. Dental crown not covered by insurance? A: You cant use grant money to pay someone who is not treated as your employee. A: You can count all the hours children are present in your home. A: No. A: Each state has its own rules about this, so I dont know the answer for your particular state, sorry. If so, the corporation must pay you with the grant money through your normal payroll process which means paying payroll taxes. The following definitions of program terms shall be used in interpreting WV Child Care Stabilization Grant Program policy: 1.1.1. A: RI DHS aims to approve two stipends to all eligible providers, depending upon fund availability. A: Apply your time-space% to the monthly mortgage payment. Child Care Relief Funding 2022. Painting is a repair. Can I put it on my 2021 tax return? 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. Q: How can I build up my Social Security benefits before I retire when my profit has not been very high? You will report this as income and pay Social Security/Medicare taxes as well as federal and state income taxes on this income. A: Yes. You do not have to pay back the Stabilization grant. No. 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. Is the grant taxable income? Below is an additional series of questions and answers about the Stabilization Grant. A: Each state has its own rules about this. . How do you determine your salary? 1 0 obj If you need to spend the grant money on items for your business, go ahead. Distribution date Deadline; Cohort 1: (Center (100+) October 5, 2021 : October 18, 2021 at 11:59 p.m. CT: Cohort 2: Center (76-100) . Funding for the grants comes from the American Rescue Plan Act. Q: We are a non-profit preschool facility in our church. If you received any other phase of the Idaho Child Care Grant, you may still be eligible for this fourth grant. Q: May I use the standard meal allowance rate to claim food expenses for an employee that eats food while working in my home? A: I dont know. Q: I had a flood in my home. Contribute to a SEP IRA or Roth IRA? Adhering to your states unique spending and reporting requirements for funds that are part of the grant through the Office of Child Care. If you do, the amount that you lower your tuition is not tax deductible. How long do I have to stay in business if I receive stabilization grant funding? For specific questions about the NJ ARP Stabilization Grant application, contact: Email: njchildcaregranttechsupport@mtxb2b.com 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: DFD-ChildCareGrants@dhs.nj.gov You can deduct all of the reimbursed meals and snacks as well as un-reimbursed meals and snacks. But, your city and county grants are taxable. Registered family child care providers are eligible for $4,000 in grants. Workforce Innovation Sustain Child Care Subsidy Operations Start-up & Expansion Paycheck Protection Retention of Child Care Staff We have received grants from our city and our county. A: You should absolutely take it. Will we have to file a tax return? Do you advise doing this? 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 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. 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