Is the child care stabilization grant taxable? A: Each state has its own rules about this, so I dont know the answer for your particular state, sorry. Discounts, scholarships and refunds are not tax deductible. A: No. A: If you are incorporated and are being treated as an employee of your corporation, then the corporation will report the grant as income. References: The Child Care and Development Block Grant (CCDBG) Act (42 U.S.C. However, you can only deduct the time-space% of your mortgage loan interest in addition to deducting house depreciation. 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. It sounds to me like this is a repair, but you should contact your state to get an official answer. Subsidized Child Care Stipends. oRT@ 66V'aNAS\u8g<05!rzf7M- (bw1RK51 wOffHg]tJ}%NaiIrIV.y3*2w@LIGFIm(IsMv You will report this as income and pay Social Security/Medicare taxes as well as federal and state income taxes on this income. Check with your state agency about this grant question. Rates are reflective of the different costs associated with each program size. Report as income, the amount you received from parents. Why are the first two programs not taxable income? All programs will receive a 1099 for grant funds received. How am I doing that? A: Yes, you can pay yourself any amount. Q: If I have staff can I still pay myself the whole amount? 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. 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. Can I deduct this? If you are an employee, your employer is withhold Social Security/Medicare taxes and sending them on to Social Security quarterly. A: No. Your state may or may not see this as a major improvement. Since you cant deduct these expenses on your 2021 tax return, youll owe taxes on the amount you apply to 2020 expenses. Applications were closed for the Child Care Stabilization 2.0 for Workforce Supports on December 14, 2022. Yes, if you are a for-profit organization this funding is taxable. 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. Under federal guidance, this clearly language clearly applies to a family child care provider, even if she has no employees. Claim this as a house repair on Form 8829. A: Its totally up to you how long you want to remain in business or when you want to close. Ive created an instructional video that answers these questions and many more. How do I get the childcare stabilization grant? Q: I have remodeled my kitchen and bathrooms. It wont matter if he doesnt sign it. You will then report your wages as income. Then put aside some money in a place that is low risk (bank savings account, short-term bond fund or money market account). Mifflintown, PA 17059. CARES Act Provides $3.5 Billion in Child Care Relief. Providers who received funding during the first round must complete an expenditure report before . Q: Is a new roof a major or minor repair? This bill, based on President Biden's bold American Rescue Plan, provides $39 billion in desperately needed child care relief funding. 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. 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. A: It depends on your familys financial situation. Q: I have two workers and pay them in cash and hope to give them IRS Form 1099. Q: If I pay my assistant with the grant, do I still have to pay taxes on it? No. Are these expenses tax deductible? She may keep the funds in the bank account as an emergency fund for later use or she can spend it as she wishes. This income will not be the same as your food expenses. California Stabilization Stipend. What is the New Child Care Stabilization Grant? Distributing the funds to employees (most states require a portion of grant funds to be paid out to employees)? 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. <>/Metadata 2634 0 R/ViewerPreferences 2635 0 R>> Is this a home improvement or a repair? 32% of employers have seen some of their employees leave the workforce due to the effects of COVID-19. Each state will receive anywhere from $39 million to $2.9 billion in funding from the grant to distribute as they see fit to eligible child-care providers. The purpose of the child care stabilization grants is to support child care centers and home-based child care providers to stay open or reopen. ]ATIGJK5NF5 4 R&a&YFhJl M2z[{F6M6 +|>Pv o+$^1-{z(*EW~l3Md Y{'m"7E:OeegN$d8=Jby&afJISI. Stipulations for what the funds can be spent on and how to properly report them. A: Each state has its own rules about this. This grant signifies a powerful gesture of government support for families and businesses as the economy recovers. endobj Child Care and Development Fund (CCDF) Home Visiting; . Should we spend everything that we receive with the grant? 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. On another slide it says that state grants are taxable income. A: The EIDL loan is not forgivable, you must pay it back over 30 years. For most providers, this would be about 30-40% in taxes. Child Care Program Stabilization Funding an OEC Ready Set Rebuild program offers money to child care programs recovering from COVID-19. L*|29j]NG0Sm59!aI6a}4r. Contact your state to get the answer. 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. 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. A: I dont know if you state would consider this a major improvement or not. I paid myself with the first one in December 2021 and thought this could only be done once, is this correct? Can I reallocate some of this money so I dont have to pay income taxes? 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. How do I figure the deductions? Will we have to file a tax return? How long do I have to stay in business if I receive stabilization grant funding? On March 4, 2020, the Governor declared a State of Emergency in California in response to COVID-19. A: Since these expenses are used by both your business and your family, apply your time-space% to these expenses. She can deduct these expenses from the taxes she owes, so she will not owe additional taxes if she receives the grant. 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: Count the entire room as regularly used as a daycare storage room. The EIDL loan you must pay back. So, this is not a requirement in Colorado. 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. Like if something happens and you have close or choose to close. Is the Child Care Program Stabilization Funding taxable? [-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 A: Dont reduce your business expenses to show a larger profit, even if that might slightly increase your Social Security benefits. The application period for ARPA Child Care Stabilization Grant subawards is closed and TDHS cannot accept new applications. Childcare isnt just a family issue, its a business issue. Q: What criteria is my state using to approve the Stabilization grants? Is this a home improvement or a repair? Paying for weekly house cleaner? ); 45 CFR Parts 98 and 99; The American Rescue Plan (ARP) Act of 2021 support provi ders unt i l June 2024. A: Yes! The American Rescue Plan Act (ARPA) has provided resources to states to distribute stabilization grants to child care providers to ensure that child care is available to support families and businesses as the economy recovers. 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 use the grant money to rewire my home? . A: You can use the Stabilization grant to pay yourself and then use the money to put an addition onto your home. 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. A: If you are self employed, you are filing IRS Form 1040SE which calculates how much Social Security/Medicare tax you owe. Q: If I was audited, would they just audit my grant or my entire business? All Rights Reserved. Is this correct? around the country, mostly small businesses, who were already operating on thin margins. Yes. Q: How to I calculate my Time Percent when children are in my care 24 hours a day? YGF:JKSj"tZO+rR&e ]ii D I Q: Are there any grants available to add on space to my home without getting a loan? A: The cost of any item that is used exclusively for your business can be deducted 100%. Q: Will getting this grant put me in a higher tax bracket? Q: I bought flowers for the front yard and new patio blocks leading to the front door. After September 30, 2022, no additional CCSG awards will be made. Below is an additional series of questions and answers about the Stabilization Grant. Child Care Stabilization Funding DECAL recognizes the critical role that child care plays in supporting children, families, businesses, and the economy as a whole. 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. A: I dont know. stabilization sub-grants, applicants are required to provide owner/administrator demographics, program operational status, and program . You can always deduct any expense that is ordinary and necessary for your business. You will probably owe no more than 40% of the grant in taxes. It doesnt matter how much or how little you are now earning. Q: My front steps/deck needs to be replaced because of rotted boards. . Adhering to your states unique spending and reporting requirements for funds that are part of the grant through the Office of Child Care. A: You cannot deduct any costs associated with a dog or cat. Q: If I transferred money to pay myself earlier but sometimes forgot to make a note, can I go back and fix it? You can deduct all of the reimbursed meals and snacks as well as un-reimbursed meals and snacks. Contact your local Child Care Resource and Referral agency to see if there are other grant programs. You will owe 15.3% in Social Security/Medicare taxes, plus any state and federal income taxes. In South Carolina, these stabilizations grants are called "SC Building Blocks". In almost every situation, a provider will benefit financially from these grants even after taxes. Q: My business is an S Corporation. 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: You arent paying yourself for any particular hours you work. 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 . If you dont spend it all you will have to return the unspent money. Grant funding amounts and distribution schedule. Q: Can I get the grant even if I dont have any helpers? The amount you pay yourself has nothing to do with how many hours you work or when you work. As long as you keep records showing you worked these hours, claim all the hours. 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! <> Q: Is the Economic Injury Disaster Loan (EIDL) a Stabilization grant or is this a loan that must be repaid? Program Amount 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! This webinar for training and technical assistance providers was presented on June 24, 2021. 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. It is also important for providers to know that not all business expenses are fully tax deductible. 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 Q: If I have parents are paying me, can I still pay myself and just make more money those months I pay myself? 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). 2021 and thought this could only be done once, is this a major or! My home stabilizations grants are taxable income fund ( CCDF ) home ;... And then use the Stabilization grants minor repair as well as un-reimbursed meals and snacks around country. 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