/ Blog / General / child care stabilization grant taxable. A: You can use a vehicle for both business and personal purposes. A: No. Q: Can I claim my couch as a tax deduction if its used by my daycare children? A: The PPP and EIDL programs are administered through the Small Business Administration. Child Care Stabilization Grant Questions and Answers. 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. But, you can pay yourself first and then use the money for these items. Q: Can I use the grant money to rewire my home? You will have to withhold and pay payroll taxes on these amounts. 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. 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. Q: If I pay a neighbor to paint my daycare with cash, how can I record this as an expense? Investing in Iowa's Child Care (IICC) Funding Program Painting is a repair. 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. Q: I gifted some of the grant back to parents because of COVID. How does this impact my taxes? Adhering to your states unique spending and reporting requirements for funds that are part of the grant through the Office of Child Care. A: The EIDL loan is not forgivable, you must pay it back over 30 years. Each state will determine how much a provider will receive based on a criteria they have developed. Q: I have two workers and pay them in cash and hope to give them IRS Form 1099. March 27, 2020: The largest enacted relief effort to date, which passed with broad bipartisan support, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, was signed into law.The CARES Act provided the Child Care and Development Block Grant (CCDBG) with $3.5 billion and Head Start programs with $750 million. L*|29j]NG0Sm59!aI6a}4r. Q: How do I pay myself if I did not lose children during COVID, and how do I calculate it? Ask your tax preparer to advise you. Q: Is a new roof a major or minor repair? There is not law that requires you to stay in business. 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: It will depend on your personal finances. <>/Metadata 1131 0 R/ViewerPreferences 1132 0 R>> 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? CARES Act Provides $3.5 Billion in Child Care Relief. We have received grants from our city and our county. You can pay yourself with the EIDL loan. Q: On my grant report I listed mortgage and utilities as expenses. Q: My front steps/deck needs to be replaced because of rotted boards. The purpose of the guidance is to help states quickly distribute the stabilizations funds to protect and support the existing child . Stabilization Grants Q: On one slide it says that the PPP and EIDL programs are not taxable income. You can deduct the amount you pay your assistant. Programs that are awarded a grant will receive an IRS Tax Form 1099-NEC. Is replacing this considered a repair or home improvement? 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. The EIDL loan you must pay back. Then put aside some money in a place that is low risk (bank savings account, short-term bond fund or money market account). Child Care Program Stabilization Funding an OEC Ready Set Rebuild program offers money to child care programs recovering from COVID-19. Q: What impact will receiving this grant have on my Social Security benefits? It may be the same or may not. 9EJH-E*!PPRs&-L\1%gh7XXjZ/ This means you will pay some additional Social Security taxes, but it also means your higher profit will potentially increase your Social Security benefits. This is clearly the case if you were receiving the lower Tier II reimbursement rate before July. A: Its a repair because you didnt remodel the entire kitchen by replacing just the cabinets. If you do sign up, please use the referral code 0659. If you do sign up, please use the referral code 0659. Your state may or may not see this as a major improvement. Q: Can I pay myself in one lump sum or do I have to pay myself weekly or biweekly? Q: If I pay myself in order to make some changes that are not covered by the Stabilization grant, should I pay myself for the cost of the project, or is there some type of guidance I should use? 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. Contact your local Child Care Resource and Referral agency to see if there are other grant programs. See the funding breakdown by state, tribe, and territory, and more information about the grant on the. Q: How do I find out where to apply for this grant? Each state has its own guidelinescheck your local government website to confirm: Who is eligible and how to apply for the grant. Is the grant taxable income? Does that mean I cannot offer a monthly or quarterly bonus? Is this a home improvement or a repair? A: No. The National Center on Early Childhood Quality Assurance and its partners at First Children's Finance shared information about the stabilization grants coming to states, territories, and Tribes. Q: Will getting this grant put me in a higher tax bracket? Is this a home improvement or a repair? Applications were closed for the Child Care Stabilization 2.0 for Workforce Supports on December 14, 2022. 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]. Q: Because of all my deductions I did not show a profit for three years. You do not have to pay back the Stabilization grant. All licensed child care providers are eligible to apply for grants, which range in amounts from $3,000 to up to $50,000 per child care site. Is this grant counted as income? Q: Is there a thing such as too many hours when claiming hours when children are not present in my home? Can painting the house be deducted as a repair? All $20 million of the One-Time Supplemental Stabilization Grant funds was awarded in January 2022. Programs that are awarded a grant will receive an IRS Tax Form 1099-NEC. [-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 This funding is subject to the same tax rules as regular CCDF funding. 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: State applications will often use the word personnel when describing what the grant can be used for. 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. 1 0 obj 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. Q: What criteria is my state using to approve the Stabilization grants? <> This program doesnt just impact parents and childcare providers either. But, you can pay yourself with the grant money and then buy a new air conditioner. endobj A: You can count all the hours children are present in your home. 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). The second child care stabilization grant was released on July 5, 2022. Clearly a couch meets that definition. Q: Has the standard meal allowance rules always been in place or is this a recent rule? 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. You will report less income in this situation, but you cant deduct anything that a parent owes you. Rates are reflective of the different costs associated with each program size. 1099, W-2? She can deduct these expenses from the taxes she owes, so she will not owe additional taxes if she receives the grant. Contact your state for the answer. Outdoor space is not considered part of the square footage of your home. If they say you cant use it for this purpose, you can pay yourself and then use the money to rewire. Q: If I pay myself will I need to give myself a W-2? She may keep the funds in the bank account as an emergency fund for later use or she can spend it as she wishes. Q: Does it matter how much income I made this year to use the Stabilization grant to pay myself? Providers who received funding during the first round must complete an expenditure report before . Q: In my state the grant money can be used to reimburse expenses back to February 2020. Our goal is to help your program become financially secure. Q: Is money I received from the Stabilization grant taxable income? A: The standard meal allowance rate has been in effect since 2003. 3 0 obj Are you saying this is not deductible? Q: If I previously took out a loan for my business, may I use the Stabilization grant to pay some of off? Q: What is the most effective way to pay my husband who is working with me full time? Q: I refunded two weeks of care for a family that had to quarantine. A: If you do so it wont impact your 2020 taxes. The purpose of STABLE is to respond to the urgent need to stabilize the child care sector in Georgia. If you are a non-profit or not-for-profit organization, this funding is tax exempt. 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? On March 4, 2020, the Governor declared a State of Emergency in California in response to COVID-19. Are the One-Time Child Care Stabilization Grant funds taxable? In that case the church is filing a tax return that includes your preschool. Operational Grant Formula Updated. Important note: Although there is federal guidance on how the Stabilization grants are to be administered, each state may interpret this guidance slightly differently. 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. A: If you are self employed, you are filing IRS Form 1040SE which calculates how much Social Security/Medicare tax you owe. Stabilization Grants, intended to support child care, early care and education and out -of-school time programs that have faced increased costs and . Q: Can I use the grant to landscape my backyard to build a play set for the daycare? No! 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. +|>Pv o+$^1-{z(*EW~l3Md Y{'m"7E:OeegN$d8=Jby&afJISI. You want to claim this large deduction. Minnesota child care providers were able to apply for these grants as part of their January 2022 Child Care Stabilization Base Grant application. Q: Can I claim Social Security on my ex-husband? 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. A: EIDL is not the Stabilization grant. Should we spend everything that we receive with the grant? This is not a loan. 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? 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! Using Child Care Stabilization Grant funds to pay federal taxes is not an allowable expense. 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. 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.. For all of the above answers that were No, you can still pay yourself and then use the money for these purposes. A: No. 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$i /]fT\PIEUrc! Instead, start making contributions to your IRA. A: I dont know if you state would consider this a major improvement or not. Distribution date Deadline; Cohort 1: (Center (100+) October 5, 2021 : October 18, 2021 at 11:59 p.m. CT: Cohort 2: Center (76-100) . A: If you did more than replace the roof shingles such as replacing the roof boards underneath the shingles, then this would probably be considered a major home improvement. Q: If I dont use receipts to calculate my food expenses, isnt the calculation a wash? A: Each state sets its own criteria. Help is on the way! It sounds to me like this is a repair, but you should contact your state to get an official answer. A: Yes, deduct the time-space% of this cost. A: Yes, under certain circumstances. In South Carolina, these stabilizations grants are called "SC Building Blocks". Child Care Stabilization Grants The American Rescue Plan Act of 2021 (ARP Act) (Pub. Q: Can I pay myself in a lump sum or spread it out weekly or monthly? Q: What do I need to do if I dont think my tax preparer properly paid my Social Security/Medicare taxes? This could include fish, gerbils, rabbits, and so on. Can I still deduct them as expenses? 721 Smith Rd. Using Indiana's federal COVID-19 relief funding, the Office of Early Childhood and Out-of-School Learning (OECOSL) launched the Build, Learn, Grow Stabilization grant program to provide critical funding to early childhood and school-age providers, support their program's operating expenses and help them rebuild their programs for the future. Q: What if I paid myself with this grant and then later realize that I can use it for items used 100% for my business. *A f$IU*HT7aAA WR S@(>v6Cv MM&@REumMT O&8 l)mxEBS~1"mk *7k=zbe=eV=YH !8~XRGTTU`=2_2m\mj4GG] G As long as you keep records showing you worked these hours, claim all the hours. Help is on the way! Q: If I was audited, would they just audit my grant or my entire 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. Q: I understand I cant lower my employees wages, but what if the employee wants to work fewer hours? A: Its totally up to you how long you want to remain in business or when you want to close. support provi ders unt i l June 2024. Q: In your opinion, if I dont need the grant, should I take it? Child Care Strong will be administered in the following three phases: Phase one will include information on eligibility, how to apply, report on the use of funding, and evaluate current operating expenses. The corporation can deduct your wages and payroll taxes. 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. On October 19, 2021, the Texas Workforce Commission ( TWC) approved distribution of $2.45 billion in American Rescue Plan Act funds for direct relief to child care programs. The following definitions of program terms shall be used in interpreting WV Child Care Stabilization Grant Program policy: 1.1.1. $3,500 income $3,500 expenses = $0 taxable income and $0 taxes owed. What does that do to my time-space%? If you are an employee, your employer is withhold Social Security/Medicare taxes and sending them on to Social Security quarterly. Using a reimbursement model, management and reporting is easy and takes the burden off your HR team. Replace worn out bedroom carpet and hallway with wood floors? Q: Do I claim the same time-space% I used last year? Is the Child Care Provider Stabilization Grant taxable? Here are the answers to the many questions raised during the webinar. 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. stream Q: When you give a bonus to your staff, do you treat the deduction the same as payroll deductions? The utilities and internet are combined. Therefore, my answers below may not be the same answers your state gives you. You can deduct the business portion of other animals that you incorporate into learning activities with the children. 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. T he new mont hl y grant amount wi l l be reduced st art i ng O ct ober 1, 2023. A: You must report Food Program reimbursements as taxable income. The Stabilization Payment Program Round 2 is a nine-month payment program that runs August 2022 through April 2023. I had a Delaware state license by March 21st, but not OCCL license until July 2021. Child Care Relief Funding 2022. A: No. Can I still receive the Stabilization grant? Beginning November 1, 2021, DHS will be using American Rescue Plan Act (ARPA) funding to increase the number of monthly absent days for the Child Care Assistance (CCA) program from 4 to 6. It had to be decontaminated and repaired. The NJ American Rescue Plan (ARP) Stabilization Grant is no longer accepting applications. T he new mont hl y grant amount and pol i cy i s i n process and under revi ew. A: No, because paying yourself does not create a deduction. 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. Law 117-2) that President Biden signed on March 11, 2021 and funding applications are now open. How am I doing that? Q: The stucco on our building needs to be repairs and we lost the majority of our landscaping due to the freeze. If you do, the amount that you lower your tuition is not tax deductible. 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.
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