Eligibility Application Recertification Questionnaire Training Grant Funds 2023 BUILD Initiative. How am I doing that? If you are a non-profit or not-for-profit organization, this funding is tax exempt. 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. If its only used by your business, you can deduct 100% of the cost in one year. 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. +|>Pv o+$^1-{z(*EW~l3Md Y{'m"7E:OeegN$d8=Jby&afJISI. Q: On one slide it says that the PPP and EIDL programs are not taxable income. A: The standard meal allowance rate has been in effect since 2003. If they are present 24 hours a day, five days a week, that represents 120 hours that you can count. Q: If I give my staff a bonus am I doing it through payroll? A: No. <>/Font<>/Pattern<>/XObject<>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI] >>/Annots[ 48 0 R 49 0 R] /MediaBox[ 0 0 540 720] /Contents 4 0 R/Group<>/Tabs/S/StructParents 0>> Thats just how the law works, some are taxable, some are not. But, you can pay yourself first and then use the money for these items. 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 must report Food Program reimbursements as taxable income. 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. Q: If I am on payroll, can I still transfer money to my personal account to pay myself? It doesnt matter if you havent lost any children. You will only save a small amount of money on your taxes when hiring your husband. Yes. Take a before and after picture of the area he painted. 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. Email Us at: providerhelp@childcaresolutionscny.org. Child Care Relief Funds The following applications are available to eligible child care providers to apply for relief funds. Why does the child care stabilization grant matter? How do I treat this on my taxes? A: State applications will often use the word personnel when describing what the grant can be used for. Subject: Child Care Stabilization Grants Appropriated in the American Rescue Plan (ARP) Act (Public Law 117-2) signed into law on March 11, 2021. Funds must be used to support the key operating expenses of child care providers to help ensure access to child care for families. 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. You would be replacing lost tuition with grant income. Should we spend everything that we receive with the grant? Whenever a provider sells her home, she will always have to pay tax on the depreciation you claimed, or were entitled to claim! You can treat this as a repair and deduct your time-space% of this cost in one year. Q: Are the Stabilization grants available in Canada? Help is on the way! 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. It wont matter if he doesnt sign it. You will always be better off financially after taking a grant, even if it increases your taxes. Tax Resources from Home Grown. oRT@ 66V'aNAS\u8g<05!rzf7M- (bw1RK51 wOffHg]tJ}%NaiIrIV.y3*2w@LIGFIm(IsMv Then the corporation must withhold payroll taxes before you receive the money. 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. 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: No, you can offer as many bonuses as you want. No. % 4 0 obj 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: You can use the grant money for all of these items. 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. Why are the first two programs not taxable income? (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. 2 0 obj 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]. A: Count the entire room as regularly used as a daycare storage room. A: You can count all hours that you work in your home, either caring for children or doing other business activities. Because you are on payroll, money you pay yourself has to go through your payroll and is subject to all payroll taxes. This builds on critical down payments on relief . You just pay yourself because you are the owner. Can I still deduct them as expenses? Afterwards it costs $99.00 a year. Childcare isnt just a family issue, its a business issue. Q: If I dont use receipts to calculate my food expenses, isnt the calculation a wash? Can I use the grant to hire a clean-up crew? Please call us at (315) 446-1220. After September 30, 2022, no additional CCSG awards will be made. Q: Can I use the grant to landscape my backyard to build a play set for the daycare? Can I use the grant money for this or would have to pay myself first? 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. Using a reimbursement model, management and reporting is easy and takes the burden off your HR team. You can choose which method to use each year. Menu. Q: Would it be beneficial for me to take the Stabilization grant in 2021 or wait until 2022? A: I am sorry to hear this. Q: Can we pay ourselves in 2022 with grant money from 2021? One extra snack per day, per child is an additional $202 deduction. Q: My state (Colorado) is requiring that 50% of the grant be used as tuition discounts. The parents got a benefit, but you didnt. endobj Are these expenses 100% business or time-space% deduction? Under federal guidance, this clearly language clearly applies to a family child care provider, even if she has no employees. Does that mean I cannot offer a monthly or quarterly bonus? A: Yes, you can deduct this in one year as a repair. Congress declared that these programs are not taxable income. 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. Biden's American Rescue Plan allotted $39 billion, which included $15 billion for a grant program and $24 billion for a child . Each state has its own guidelinescheck your local government website to confirm: Who is eligible and how to apply for the grant. And while many childcare providers have opened back up, its been anything but easy. 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. Can I use the grant money for these expenses? This income will not be the same as your food expenses. Q: I refunded two weeks of care for a family that had to quarantine. p stream 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. You can deduct the amount you pay your assistant. Are those grants considered taxable income? 32% of employers have seen some of their employees leave the workforce due to the effects of COVID-19. A: Yes, deduct the time-space% of this cost. Q: I gifted some of the grant back to parents because of COVID. Is there a limit to the number of programs that will be funded? Q: Can I pay myself in a lump sum or spread it out weekly or monthly? Child care providers that receive a grant have a reporting obligation on Form 1099-G if the amount is above $600. Q: Can I use the Stabilization grant to purchase a home? Q: Are the Stabilization grant requirements the same from state to state as to what I can use the money for? Q: I have two workers and pay them in cash and hope to give them IRS Form 1099. . We have received grants from our city and our county. 1 0 obj Q: Is the Paycheck Protection Program (PPP) taxable income? Q: Can I pay myself in one lump sum or do I have to pay myself weekly or biweekly? No. Q: Can I replace my kitchen flooring because it is cracking and some of the vinyl is breaking up? Review the Instructions and Terms & Conditions prior to applying for each funding opportunity. Here are the answers to the many questions raised during the webinar. Q: If I only have one child, can I still apply for the grant? Q: I understand I cant lower my employees wages, but what if the employee wants to work fewer hours? A: You can deduct your Time-Space% of your utilities. ); 45 CFR Parts 98 and 99; The American Rescue Plan (ARP) Act of 2021 Q: I have remodeled my kitchen and bathrooms. A: The cost of any item that is used exclusively for your business can be deducted 100%. If it is permanently attached to the land, you must depreciate the business portion of the cost over 39 years. Is this a home improvement or a repair? A: If you pay your husband you must treat him as an employee and file the W-2, not a 1099. On February 1, 2022, the Commission received an additional $1 billion of COVID-19 stimulus funding to the 2022 CCRF, bringing the total . Q: Do I have to have a child care license by March 21, 2021 to receive the Stabilization 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. Q: I moved my child care business out of my home into a separate building. Q: Can I use the Stabilization grant to replace my old central air condition unit? Q: How to I calculate the percentage of mortgage payments? Q: What criteria is my state using to approve the Stabilization grants? Q: Does the federal guidance for this grant require providers to gift any of it to parents? 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. If you are a sole proprietor (self employed), you do not take out payroll taxes before paying yourself. The Child Care Stabilization Grant is income to your business and is taxable by the state and federal government. 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. No! 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. A: You cant use grant money to pay someone who is not treated as your employee. 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. Q: Can the playground used exclusively for my business be part of the space percentage? Report as income, the amount you received from parents. 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. State tax rules apply. *l.dyY 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: Pay yourself first. <>/Metadata 1131 0 R/ViewerPreferences 1132 0 R>> 9857 et seq. But, your city and county grants are taxable. This program doesnt just impact parents and childcare providers either. Q: My son is a part-time assistance that I dont do payroll taxes for him. A: Yes, with the exception of a home, home improvement or home addition. The grants cannot be used for new construction or major renovations. Subsidized Child Care Stipends. This webinar, presented by child care business expert, Tom Copeland, will cover all the new tax changes affecting family child care providers for 2021. endobj Is replacing this considered a repair or home improvement? No. Z~0^ I5%jE6)jh2!Z4Wq3 Discounts, scholarships and refunds are not tax deductible. Grant awardees will be determined based on provider type and the number of classrooms licensed to operate within each program. I plan to discount the current family tuition evenly. Then put aside some money in a place that is low risk (bank savings account, short-term bond fund or money market account). 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. Q: If I pay my assistant with the grant, do I still have to pay taxes on it? 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. See the funding breakdown by state, tribe, and territory, and more information about the grant on the White House American Rescue Plan Funding Fact Sheet. Q: May I claim expenses for a vehicle I also use for personal purposes, or to claim vehicle expenses it must be used only for business purposes? Where to find more information You will have to withhold and pay payroll taxes on these amounts. All organizations receiving funding must report this as income to your program. Can I add the attic space in my time-space% calculation? Can I still receive the Stabilization grant? For tax purposes, she should reserve a portion of the grant amount to go toward her taxes. There has never been this amount of federal funding dedicated to childcare providers, which makes this an incredible opportunity. Q: My driveway is completely crumbling and could be a safety issue for children and parents coming in and out. A: No, that would probably be considered a major improvement. Child care has received $54 billion since the start of the pandemic. Claim this as a house repair on Form 8829. A: You can use a vehicle for both business and personal purposes. Q: If I use the grant for my IRA, can I deduct 100% of this on my taxes? child care, child and adult protective services, adoption, and child support services. A: All non-profits should be filing a tax return, unless your preschool is owned by the children. Q: I did not include the grant I got in 2020 on my 2020 tax return. Q: Is a new roof a major or minor repair? This funding is subject to the same state and federal tax rules as regular Child Care Development Fund (CCDF) funding. A: Yes! A: It depends on your familys financial situation. Q: My front steps/deck needs to be replaced because of rotted boards. 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. Such a record could say, February 23, 2022 - $4,000 pay myself with the Stabilization grant.. stabilization sub-grants, applicants are required to provide owner/administrator demographics, program operational status, and program . A: You can use the grant money directly for these expenses. You want to claim this large deduction. You can deduct all of the reimbursed meals and snacks as well as un-reimbursed meals and snacks. Almost two-thirds of childcare centers are serving less than 75 children and are struggling to break even. Tom Copelands Blog: Taking Care of Business Can I deduct this? Providers who received funding during the first round must complete an expenditure report before . How do I figure the deductions? Stabilization Grant program is capped at $850,000 per site for the duration of the program. 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. 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 Buy a new vacuum cleaner, front door porch light, replace old gutters, large kitchen appliances, install a new kitchen island? The two-year grant period is scheduled to end in September 2023, meaning eligible employees may receive . Q: I use my deck as an outdoor classroom due to COVID. Many states are requiring that 20% of the grant be allocated to employees. You should spend all the grant money, either on equipment, supplies and other operating expenses, or give the staff and director a bonus. This is not a loan. She can deduct these expenses from the taxes she owes, so she will not owe additional taxes if she receives the grant. The webinar highlighted tools to help apply for the . In almost every situation, a provider will benefit financially from these grants even after taxes. endobj You will owe 15.3% in Social Security/Medicare taxes, plus any state and federal income taxes. If the separate building is 40% of the size of the home, then deduct 40% of these costs. 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. What does that do to my time-space%? Registered family child care providers are eligible for $4,000 in grants. Distribution date Deadline; Cohort 1: (Center (100+) October 5, 2021 : October 18, 2021 at 11:59 p.m. CT: Cohort 2: Center (76-100) . Q: Is the Stabilization grant taxable income? A: No! Programs that are awarded a grant will receive an IRS Tax Form 1099-NEC. A: Yes. 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. And federal income taxes September 2023, meaning child care stabilization grant taxable employees may receive report as income, the you... 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