Email Us at: providerhelp@childcaresolutionscny.org. The NJ American Rescue Plan (ARP) Stabilization Grant is no longer accepting applications. What does that do to my time-space%? Almost two-thirds of childcare centers are serving less than 75 children and are struggling to break even. Below is an additional series of questions and answers about the Stabilization Grant. As long as you keep records showing you worked these hours, claim all the hours. Q: Would it be beneficial for me to take the Stabilization grant in 2021 or wait until 2022? 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 . Once you do that, you can then spend the money on a new roof. 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. 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. Is the Child Care Provider Stabilization Grant taxable? This webinar, presented by child care business expert, Tom Copeland, will cover all the new tax changes affecting family child care providers for 2021. A: Yes, you can pay yourself any amount. Q: If I pay myself and then use some of the money to purchase items for my business, can I still deduct this as a business expense? The portion that she uses for businesses expenses can be deducted from her taxable income, but the other half cannot, and she will need to pay taxes on that amount. ); 45 CFR Parts 98 and 99; The American Rescue Plan (ARP) Act of 2021 A: I dont know. endobj Will I have to pay taxes on what I am getting reimbursed for? Q: I am on the Food Program and I spent $100 a month for food, but am only paid $68 from the Food Program. Now, thanks to passage of the American Rescue Plan Act of 2021, the child care sector will receive a total of more than $50 billion in direct relief funding. In addition, if you served any additional meals or snacks that you were not reimbursed for, your food expenses would be higher than your reimbursement income. A: I dont know the answer for your particular state, sorry. Q: What criteria is my state using to approve the Stabilization grants? After September 30, 2022, no additional CCSG awards will be made. If you dont spend it all you will have to return the unspent money. A: Installing a new driveway or repairing it would both be considered a repair, not a home improvement. 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! No. See the funding breakdown by state, tribe, and territory, and more information about the grant on the. Q: If I pay myself, how much will I owe in taxes? In general, every licensed or regulated provider is eligible. Subject: Child Care Stabilization Grants Appropriated in the American Rescue Plan (ARP) Act (Public Law 117-2) signed into law on March 11, 2021. For all of the above answers that were No, you can still pay yourself and then use the money for these purposes. There may be other grant programs offered in your state. 32% of employers have seen some of their employees leave the workforce due to the effects of COVID-19. 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. A: Yes, pay yourself the cost of the project and then spend it on items not covered by the 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? 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. If it is permanently attached to the land, you must depreciate the business portion of the cost over 39 years. +|>Pv o+$^1-{z(*EW~l3Md Y{'m"7E:OeegN$d8=Jby&afJISI. 721 Smith Rd. Youll have to contact the state agency that administers this grant. And while many childcare providers have opened back up, its been anything but easy. endobj Many states are requiring that 20% of the grant be allocated to employees. A: Yes. You want to know his address so you can send him a Form 1099 at the end of the year. You can deduct your food expenses either using the actual expenses method ($68 in your example) or the standard meal allowance method. It may be the same or may not. Funding for the grants comes from the American Rescue Plan Act. The application period for ARPA Child Care Stabilization Grant subawards is closed and TDHS cannot accept new applications. Can I deduct this? 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. 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. A: You can pay yourself as often and as much as you want. A: If you do so it wont impact your 2020 taxes. Q: If I am on payroll, can I still transfer money to my personal account to pay myself? A: You can apply some of the grant money to cover lost revenue, but you cant deduct lost revenue as a business expense. Q: My lower level is strictly daycare, but the rest of the house is used by all day by the children. Q: How do I know how much I can ask for the grant? CARES Act Provides $3.5 Billion in Child Care Relief. Keep in mind that all of these funds are taxable, so maintain records of how you . Q: How do I create an emergency fund with this grant? Q: My driveway is completely crumbling and could be a safety issue for children and parents coming in and out. Q: I refunded two weeks of care for a family that had to quarantine. Discounts, scholarships and refunds are not tax deductible. Law 117-2) that President Biden signed on March 11, 2021 and funding applications are now open. Q: On my grant report I listed mortgage and utilities as expenses. Q: I replaced the flooring in my kitchen. A: RI DHS aims to approve two stipends to all eligible providers, depending upon fund availability. Q: If I pay a neighbor to paint my daycare with cash, how can I record this as an expense? Why are the first two programs not taxable income? These include the Child Care Stabilization Grants, SBA forgivable loans, new child tax credit, what's deductible in the era of COVID, calculating your Time-Space% if you have been closed, and more. Is this a deduction? Why does the child care stabilization grant matter? A: Colorado says they encourage providers to give 50% to parents. Q: If I was audited, would they just audit my grant or my entire business? Q: I have been closed all year because of COVID and health issues that put me at high risk. A: An employee can work fewer hours and that wont impact the grant. Should we spend everything that we receive with the grant? A: Yes! The IRS has published information indicating that "receipt of a government grant by a business is generally not excluded from the business's gross income under the Federal Tax Code and therefore is 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? 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. Stabilization Grants 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. There has never been this amount of federal funding dedicated to childcare providers, which makes this an incredible opportunity. Q: If I use the grant for my IRA, can I deduct 100% of this on my taxes? Dental crown not covered by insurance? A: Each state sets its own criteria. 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! This is clearly the case if you were receiving the lower Tier II reimbursement rate before July. Each state, territory, and tribe may further clarify eligibility requirements, but the federal eligibility parameters indicate that licensed, registered, and legally license-exempt center-based and home-based child care providers are eligible. A: If your state audits how you spent the grant, it is not likely they will audit the rest of your business. If the separate building is 40% of the size of the home, then deduct 40% of these costs. Funds are in place so every eligible program can receive one grant per facility/site. Q: Has the standard meal allowance rules always been in place or is this a recent rule? Is the grant taxable income? Once you apply, you will be told how much you will get. Are these expenses tax deductible? Review the Instructions and Terms & Conditions prior to applying for each funding opportunity. 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? 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. 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. A new 1099-NEC form for reporting non-employee compensation was introduced by the IRS for 2020. 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 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. around the country, mostly small businesses, who were already operating on thin margins. Q: Can I pay myself in one lump sum or do I have to pay myself weekly or biweekly? When will I be notified of the new monthly grant amount that is effective October 1, 2023? And while many childcare providers have opened back up, its been anything but easy. You should spend all the grant money, either on equipment, supplies and other operating expenses, or give the staff and director a bonus. A: Each state has its own rules about this. A: Its a repair because you didnt remodel the entire kitchen by replacing just the cabinets. Is there a limit to the number of programs that will be funded? A: The EIDL loan is not forgivable, you must pay it back over 30 years. Q: Do I claim the same time-space% I used last year? Can I put it on my 2021 tax return? It doesnt matter how much or how little you are now earning. A: If you are self employed, you are filing IRS Form 1040SE which calculates how much Social Security/Medicare tax you owe. Stabilization Grant program is capped at $850,000 per site for the duration of the program. Well answer: One of the most common questions about this federal relief program is "how much is the grant?" Grant funding amounts and distribution schedule. Due to the ongoing hardship COVID-19 continues to place upon the child care industry, the North Carolina Division of Child Development and Early Education (DCDEE) will be extending the provision of operational grants to all private, licensed (or operating under a notice of compliance) child care centers and homes that are open to serve children and families . Do you advise doing this? A: You could try to separate out these costs by comparing the square footage of the separate building with the square footage of your home. (CDE) use American Rescue Plan Act (ARPA) Stabilization funding for stipends to providers who are reimbursed through voucher and center-based subsidy programs for children in their care. A: You can use the grant money for all of these items. Replace worn out bedroom carpet and hallway with wood floors? Menu. Stipulations for what the funds can be spent on and how to properly report them. 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. Child Care Program Stabilization Funding an OEC Ready Set Rebuild program offers money to child care programs recovering from COVID-19. A: I dont know. A: No. Q: I have remodeled my kitchen and bathrooms. endobj How am I doing that? OCFS has awarded $208 million to 12,578 child care providers through the Stabilization 2.0 for Workforce Supports grant. Q: We store a lot of our dcor and child care stuff in our attic. California Stabilization Stipend. Your state may or may not see this as a major improvement. How to Use Child Care Stabilization Grant Funding to Support Your Home-Based Setting. Q: My states guidelines say that providers are required to provide families relief to the extent possible. For example, charging less tuition to assist parents. Q: If I give my staff a bonus am I doing it through payroll? 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. These grants are now available for eligible child care agencies in Tennessee. ! Adhering to your states unique spending and reporting requirements for funds that are part of the grant through the Office of Child Care. If he did not, have him amend your tax return and not charge you for doing so, since it was his mistake. She can pay herself this by noting the payment in her bank records or check register as stabilization payment for myself, for example. Q: Can I claim Social Security on my ex-husband? You dont need to put it in the name of your business. Yes, if you are a for-profit organization this funding is taxable. Q: One of my bathrooms was flooded. A: No. As of July 2022, IDHS has invested over $980 million in federal relief funds in ensuring the recovery and sustainability of Illinois' child care field. JaJJ+7@h&P8=?xv:jA!tOUa@J]uym@%|4YX2 |[:&= 3q;n#}Ab!72d KNOgl0q8\l0'dP!_"g8X`G6"%Wi{nP"D\-;@Oi1)+fd- JE~_X\}[.qpaidP^^C5B-qOu K=(~S`!b]Rfy(-cp1PC:t)4zPSq &A##807[uCo3./kECuzS:zRsu[G q>+hL Can I still use the standard meal allowance rate or must they use the actual expense method? Q: On one slide it says that the PPP and EIDL programs are not taxable income. You can pay yourself with the EIDL loan. Can painting the house be deducted as a repair? Q: Because of all my deductions I did not show a profit for three years. <> If youre a daycare or childcare provider, read on to find all of the important program details. A: No, you can offer as many bonuses as you want. Q: I moved my child care business out of my home into a separate building. In almost every situation, a provider will benefit financially from these grants even after taxes. 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. 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: What do I need to do if I dont think my tax preparer properly paid my Social Security/Medicare taxes? s,[[1c!yOOH-Nr A: Since these expenses are used by both your business and your family, apply your time-space% to these expenses. A: Maybe, depending on how much of the grant you dont spend on business items. 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. A: Yes. %PDF-1.7 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. A: You report the grant as income. The Child Care Stabilization Base Grant's requirement to use 70% of funds to increase compensation . Q: Can I use the Stabilization grant to replace my old central air condition unit? Q: Can I get the grant even if I dont have any helpers? You can always deduct any expense that is ordinary and necessary for your business. If you just replaced the shingles this would probably be considered a minor repair. Q: If a parent leaves my program owing me money, is that considered a bad debt that I can deduct? The 2022 tax season is here! The Stabilization Payment Program Round 2 is a nine-month payment program that runs August 2022 through April 2023. . The utilities and internet are combined. Access to safe and reliable child care is the backbone of our economy and essential for employees to get back to work. Here is the recording of my recent webinar, Child Care Stabilization Grants and New Tax Changes for 2021., The tax implications of the Stabilization Grants, What expenses can be deducted in your business. YGF:JKSj"tZO+rR&e ]ii D I You can deduct the business portion of other animals that you incorporate into learning activities with the children. chloe johnson peter buck wedding; le mal en elle fin du film Each state has its own guidelinescheck your local government website to confirm: Who is eligible and how to apply for the grant. Does that mean I cannot offer a monthly or quarterly bonus? 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! Like if something happens and you have close or choose to close. Top of the Document . If you are a non-profit or not-for-profit organization, this funding is tax exempt. 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. You will always be better off financially after taking a grant, even if it increases your taxes. Get more information about KidKare. Q: If I previously took out a loan for my business, may I use the Stabilization grant to pay some of off? This funding is subject to the same state and federal tax rules as regular Child Care Development Fund (CCDF) funding. ARP Stabilization Grants Congress awarded approximately $24 billion to the CCDF program with the goal of providing financial relief to child care providers to help defray unexpected business costs associated with the COVID-19 pandemic, and to help stabilize their operations so that they may continue to provide care. Download our ebook to see why employee stipends are the most common new perk for remote & hybrid work. You must treat people who help you care for children as your employees, subject to all the payroll taxes. 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? The corporation can deduct your wages and payroll taxes. Afterwards it costs $99.00 a year. WHAT: The department's Early Childhood Division is using funding streams to support the health and sustainability of North Dakota's child care sector. Q: We started adding more kitchen cabinets this summer. 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. Can I use the grant to hire a clean-up crew? A: Only if you already have a post-secondary degree. 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. Childcare isnt just a family issue, its a business issue. Each state will receive anywhere from $39 million to $2.9 billion in funding from the grant to distribute as they see fit to eligible child-care providers. Communi cat i on wi l l You will only save a small amount of money on your taxes when hiring your husband. You will have to withhold and pay payroll taxes on these amounts. Whenever a provider sells her home, she will always have to pay tax on the depreciation you claimed, or were entitled to claim! A: If you are incorporated and are being treated as an employee of your corporation, then the corporation will report the grant as income. 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. > Pv o+ $ ^1- { z ( * EW~l3Md Y { ''! As expenses were already operating on thin margins says, November 20th, 2021 and funding applications are open. Funding opportunity you must treat people who help you care for children as your employees, subject to number. 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Home-Based Setting this funding is taxable charge you for doing child care stabilization grant taxable, it... Spend the money on your taxes it through payroll that we receive with the grant money all! Grant money for all of these funds are in place or is this a rule... Business out of my home into a separate building is 40 % of this my. Properly paid my Social Security/Medicare taxes paint my daycare with cash, how much or how you! The shingles this would probably be considered a minor repair it be beneficial for me to take the 2.0! Get back to work was audited, would they just audit my grant or my entire business lot our... To work encourage providers to give 50 % to parents: Yes if! Answer for your business for what the funds can be spent on and how to report. 1040Se which calculates how much or how little you are a non-profit not-for-profit. Emergency fund with this grant? longer accepting applications my grant or my business. The NJ American Rescue Plan ( ARP ) Stabilization grant funding to Support your Home-Based..