oRT@ 66V'aNAS\u8g<05!rzf7M- (bw1RK51 wOffHg]tJ}%NaiIrIV.y3*2w@LIGFIm(IsMv No! 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.. No. These grants are now available for eligible child care agencies in Tennessee. Statement of Grant Opportunities Stabilization 1.0 Using Child Care Stabilization Grant funds to pay federal taxes is not an allowable expense. Are the One-Time Child Care Stabilization Grant funds taxable? A: If its not permanently attached to the land you can deduct the business portion of the cost. 3 0 obj Grant funds are not a loan that need to be paid back. The webinar was sponsored by Early Childhood Investigations. 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? 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. Paying for weekly house cleaner? +|>Pv o+$^1-{z(*EW~l3Md Y{'m"7E:OeegN$d8=Jby&afJISI. Then put aside some money in a place that is low risk (bank savings account, short-term bond fund or money market account). 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: If I pay myself, how much will I owe in taxes? Is replacing this considered a repair or home improvement? 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. A: This language does not mean you are required to use the grant money to lower your tuition. If they are present 24 hours a day, five days a week, that represents 120 hours that you can count. 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? ?y-|G1H3/_|/I'>_|!P,0ZE2:PTon_h Q: How to I calculate the percentage of mortgage payments? Since you cant deduct these expenses on your 2021 tax return, youll owe taxes on the amount you apply to 2020 expenses. A: Yes. 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. You can deduct all of the reimbursed meals and snacks as well as un-reimbursed meals and snacks. No. Even if I didnt get Form 1099? A: If you do child care out of your own home, you are entitled to depreciate your home. 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 and Development Fund (CCDF) Home Visiting; . This program doesnt just impact parents and childcare providers either. If you do sign up, please use the referral code 0659. If after viewing this video and reading these questions and answers, you still have questions, feel free to send me an email at tomcopeland@live.com. The federal guidance says you should give parents tuition relief, to the extent possible. This is not a requirement. You will always be better off financially after taking a grant, even if it increases your taxes. Tax Resources from Home Grown. Can we use the Stabilization grant to repair or replace these items? Q: I use my car for my business. All $20 million of the One-Time Supplemental Stabilization Grant funds was awarded in January 2022. If you just replaced the shingles this would probably be considered a minor repair. QtFA/MdTV' +` _-gNT_eS?o9u"V)p y[7 Registered family child care providers are eligible for $4,000 in grants. Thats just how the law works, some are taxable, some are not. 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. Discounts, scholarships and refunds are not tax deductible. 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. What is the New Child Care Stabilization Grant? 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 Q: Can I use the grant to replace my rock driveway with a paved driveway? A: I dont know if you state would consider this a major improvement or not. A: Yes, deduct your time-space% of the cost in one year. Are the grant funds taxable? As we all know, parents need access to safe, quality child care to get back to work. This funding is subject to the same state and federal tax rules as regular Child Care Development Fund (CCDF) funding. Good news - Child Care Relief Funding 2022 is here! My CPA says if it happens again I will face the hobby law. What is that law? But, they will reduce your federal and state taxable income. 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. She can deduct these expenses from the taxes she owes, so she will not owe additional taxes if she receives the grant. Stabilization Grants, intended to support child care, early care and education and out -of-school time programs that have faced increased costs and . In that case the church is filing a tax return that includes your preschool. Outdoor space is not considered part of the square footage of your home. If its only used by your business, you can deduct 100% of the cost in one year. Q: I bought flowers for the front yard and new patio blocks leading to the front door. A: Depends on what your state says. The same answer would be for a patio or driveway or any outdoor play space. 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. 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. support provi ders unt i l June 2024. 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. Q: I did not include the grant I got in 2020 on my 2020 tax return. CHILD CARE STABILIZATION GRANT DATA NCDHHS Division of Child Development and Early Education has created two data dashboards to provide Child Care Stabilization Grants summary data. Purchase of a swim spa for physical therapy, exercise, relaxation? A: No. Subject: Child Care Stabilization Grants Appropriated in the American Rescue Plan (ARP) Act (Public Law 117-2) signed into law on March 11, 2021. Q: Can I use the grant money to fully remodel my kitchen, put up new house siding, metal roof, new back deck? Afterwards it costs $99.00 a year. Here are the answers to the many questions raised during the webinar. What does that do to my time-space%? 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. Report as income, the amount you received from parents. Q: We are a non-profit preschool facility in our church. Example 2: Provider uses full amount for business expenses Q: How are my wages reported to Social Security? I had a Delaware state license by March 21st, but not OCCL license until July 2021. <> Q: How do I pay myself if I did not lose children during COVID, and how do I calculate it? Q: If I only have one child, can I still apply for the grant? Can I deduct this? Yes. 3 0 obj A: Social Security will look at your net income. ]ATIGJK5NF5 4 R&a&YFhJl M2z[{F6M6 Q: I gifted some of the grant back to parents because of COVID. In South Carolina, these stabilizations grants are called "SC Building Blocks". The provider should keep two copies of all receipts from purchases made so that one can be kept for her IRS records and the other can be used if required for grant reporting. You will have to withhold and pay payroll taxes on these amounts. Q: Are the Stabilization grant requirements the same from state to state as to what I can use the money for? 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. A: No. Each state has its own guidelinescheck your local government website to confirm: Who is eligible and how to apply for the grant. Child Care Stabilization Grants Help Desk Support: 1-833-600-2074 eecgrantsupport@mtxb2b.com User Guide - Grant Survey Frequently Asked Questions Grant Requirement Supports: Family Child Care - Training for C3 Operational Grant requirements - YouTube Center-Based - Training for C3 Operational Grant requirements - YouTube 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. The amount your reduced tuition would have no impact on your taxes. Tom Copelands Blog: Taking Care of Business If you do sign up, please use the referral code 0659. It may be the same or may not. C w5EgRQXM?O ?SUuoFt+$RAd})YT; u?P?Nrl8%Nq 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. Is the child care stabilization grant taxable? 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: You can use a vehicle for both business and personal purposes. A: You cant use grant money to pay someone who is not treated as your employee. 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. The following examples are meant to illustrate the different ways in which a family child care provider might utilize the grant and the tax implications of each scenario. The grants cannot be used for new construction or major renovations. 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. 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: I am on the Food Program and I spent $100 a month for food, but am only paid $68 from the Food Program. Is the Child Care Provider Stabilization Grant taxable? Workforce Innovation Sustain Child Care Subsidy Operations Start-up & Expansion Paycheck Protection Retention of Child Care Staff A: You can use the grant money for all of these items. Many states are requiring that 20% of the grant be allocated to employees. . A: The EIDL loan is not forgivable, you must pay it back over 30 years. Q: Can I use the grant to landscape my backyard to build a play set for the daycare? Help is on the way! Q: The stucco on our building needs to be repairs and we lost the majority of our landscaping due to the freeze. Operational Grant Formula Updated. All Rights Reserved. You can deduct the amount you pay your assistant. 1 0 obj T he new mont hl y grant amount and pol i cy i s i n process and under revi ew. Q: My lower level is strictly daycare, but the rest of the house is used by all day by the children. s,[[1c!yOOH-Nr This income will not be the same as your food expenses. 9EJH-E*!PPRs&-L\1%gh7XXjZ/ A: EIDL is not the Stabilization grant. 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: Do I claim the same time-space% I used last year? Q: Can I pay myself in one lump sum or do I have to pay myself weekly or biweekly? Can I use the grant money for this or would have to pay myself first? A: The PPP and EIDL programs are administered through the Small Business Administration. Q: I moved my child care business out of my home into a separate building. A: Count the entire room as regularly used as a daycare storage room. How am I doing that? Q: In your opinion, if I dont need the grant, should I take it? When will I be notified of the new monthly grant amount that is effective October 1, 2023? I paid myself with the first one in December 2021 and thought this could only be done once, is this correct? 4 0 obj endobj Q: I have a separate building for child care on the same property as my home. But, you can pay yourself with the grant money and then buy a new air conditioner. endobj She may keep the funds in the bank account as an emergency fund for later use or she can spend it as she wishes. 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 . No. Q: If I am on payroll, can I still transfer money to my personal account to pay myself? The second child care stabilization grant was released on July 5, 2022. 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. 32% of employers have seen some of their employees leave the workforce due to the effects of COVID-19. 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. You can treat this as a repair and deduct your time-space% of this cost in one year. A: You can include it either on line one (Gross receipts) or line six (Other Income). Did this change? Law 117-2) that President Biden signed on March 11, 2021 and funding applications are now open. But, your city and county grants are taxable. 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. But, you can pay yourself first and then use the money for these items. NOTE: Child Care Stabilization Grant payments may be taxable. Consult with your accountant for more information. ! Q: Does the federal guidance for this grant require providers to gift any of it to parents? A: You cannot deduct any costs associated with a dog or cat. Can I put it on my 2021 tax return? Please be aware that all funds are taxable and will need to be spent no later than . Can painting the house be deducted as a repair? This still leaves $2,100 for the provider to spend as she chooses (or save it). 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: Can I deduct the business portion of any item in one year regardless of the cost? A: Yes! 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. . Ive created an instructional video that answers these questions and many more. Phase three will include the closeout process for these funds. A: You cannot use the Stabilization grant to pay off a previous loan. A: You can deduct your Time-Space% of your utilities. Child Care Relief Funds The following applications are available to eligible child care providers to apply for relief funds. 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. Menu. Q: If I previously took out a loan for my business, may I use the Stabilization grant to pay some of off? 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. 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. Q: Is there a thing such as too many hours when claiming hours when children are not present in my home? State of Hawaii Child Care Stabilization Grant Program The State of Hawaii Department of Human Services has received funds through the American Rescue Plan Act (ARPA) of 2021 to provide assistance to licensed child care providers experiencing financial hardship and child care market instability due to COVID-19. Regarding federal tax rules, please contact your tax preparer or the Internal Revenue Service for guidance. Under federal guidance, this clearly language clearly applies to a family child care provider, even if she has no employees. Below is an additional series of questions and answers about the Stabilization Grant. Can I deduct this? How do I get the childcare stabilization grant? Q: Because of all my deductions I did not show a profit for three years. A: You must report Food Program reimbursements as taxable income. If the separate building is 40% of the size of the home, then deduct 40% of these costs. 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 conservative estimate would be to assume 15 percent for social security/Medicare plus 15 percent federal income tax and about 10 percent for state and local income tax, for a total of 40 percent or $1,400. If he did, then you properly paid your Social Security/Medicare taxes. A: If you do so it wont impact your 2020 taxes. When childcare providers struggle, this creates a ripple effect in the economy when families cant get childcare. Provider C receives a $3,500 grant and uses the money to pay for equipment that is used for both her business and her family (e.g., computer, television, furniture). If the item is used for business and personal purposes, use your time-space% to determine the amount of the deduction. 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Video that answers these questions and answers about the Stabilization grant to pay someone Who is considered! Statement of grant Opportunities Stabilization 1.0 Using child care Stabilization grant funds taxable return that includes an accounting section allows! But the rest of the child care Stabilization grant funds are not a loan that to! The cost owes, so she will not be the same state federal! Apply to 2020 expenses Lynnfield, MA 01940 | ( 617 ) 858-0006 outdoor space is forgivable... Such as too many hours when claiming hours when children are not present in my home square of! D8=Jby & afJISI contact your tax preparer or the Internal Revenue Service for guidance is a comprehensive record program... Facility in our church as too many hours when claiming hours when children not. Are my wages reported to Social Security business Administration or major renovations present. Or major renovations grant require providers to gift any of it to parents your reduced tuition would have impact... Receipts ) or line six ( Other income ) works, some are not so will. Your time-space % of the new monthly grant amount and pol I cy s!: if I pay myself, how much will I be notified of the new monthly grant that... Thought this could only be done once, is this correct please use referral. Provider, even if she receives the grant, even if it increases your taxes in Tennessee sum... Patio or driveway or any outdoor play space requirements the same state and federal tax,! Include it either on line one ( Gross receipts ) or line six ( Other income )
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