Q: Can I get the grant even if I dont have any helpers? This bill, based on President Biden's bold American Rescue Plan, provides $39 billion in desperately needed child care relief funding. Or call the OCFS Stabilization Help Line: (844) 863-9319. Q: I bought flowers for the front yard and new patio blocks leading to the front door. A: All non-profits should be filing a tax return, unless your preschool is owned by the children. 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. Even if I didnt get Form 1099? Q: Can I claim Social Security on my ex-husband? Certificate of Registration: A statement issued by the Commissioner for a period of up to two years to a family child care home upon receipt of a self-certification statement I had a Delaware state license by March 21st, but not OCCL license until July 2021. 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. 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. Q: If I was audited, would they just audit my grant or my entire business? Our goal is to help your program become financially secure. Report as income, the amount you received from parents. 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? 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. A: You must report Food Program reimbursements as taxable income. A: If you pay yourself with the grant and then buy items used 100% for your business, you wont owe any taxes on the amount you use the grant for this purpose. For example, can I give one employee $500 and another employee $300 if they are not as productive? stabilization sub-grants, applicants are required to provide owner/administrator demographics, program operational status, and program . Q: Is money I received from the Stabilization grant taxable income? 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? If you do, the amount that you lower your tuition is not tax deductible. A: Assuming the money you spend on items for your business are used exclusively for your business, the tax consequences are the same as paying yourself. This funding is subject to the same state and federal tax rules as regular Child Care Development Fund (CCDF) funding. How much will my daycare get from the childcare stabilization grant? You do not have to pay back the Stabilization grant. The utilities and internet are combined. The grants cannot be used for new construction or major renovations. Are these expenses tax deductible? 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. 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. Q: What is the most effective way to pay my husband who is working with me full time? Phase two will include application, awarding, and issuing of funding. Biden's American Rescue Plan allotted $39 billion, which included $15 billion for a grant program and $24 billion for a child . A: If you do so it wont impact your 2020 taxes. 3 0 obj We are planning on finishing the kitchen after the first of the year by replacing the old cabinets. All $20 million of the One-Time Supplemental Stabilization Grant funds was awarded in January 2022. Provider B receives a $3,500 grant and uses it to pay expenses for her business that she would not otherwise pay (e.g., extra employee wages, cleaning supplies, toys). A: Depends on what your state says. A: You can count all the hours children are present in your home. child care, child and adult protective services, adoption, and child support services. A: You should absolutely take it. Can we use the Stabilization grant to repair or replace these items? A: No! Can I use the grant money for this or would have to pay myself first? Q: Is a new roof a major or minor repair? California Stabilization Stipend. This means you will pay some additional Social Security taxes, but it also means your higher profit will potentially increase your Social Security benefits. Q: If I have staff can I still pay myself the whole amount? 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]. Is there a limit to the number of programs that will be funded? Q: How are my wages reported to Social Security? We can provide technical assistance and have brief training videos and materials available to help complete the process. You can use this amount with grant money. 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. This is clearly the case if you were receiving the lower Tier II reimbursement rate before July. A: Yes, under certain circumstances. Funds are distributed directly from your state via the Office of Child Care and, if all of your states spending and reporting requirements are met, there is no requirement to repay funds. endobj For most providers, this would be about 30-40% in taxes. Q: On one slide it says that the PPP and EIDL programs are not taxable income. Is this grant counted as income? You can deduct all of the reimbursed meals and snacks as well as un-reimbursed meals and snacks. Communi cat i on wi l l Funds must be used to support the key operating expenses of child care providers to help ensure access to child care for families. If you just replaced the shingles this would probably be considered a minor repair. Q: Is the Paycheck Protection Program (PPP) taxable income? Distributing the funds to employees (most states require a portion of grant funds to be paid out to employees)? 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. Child care providers that receive a grant have a reporting obligation on Form 1099-G if the amount is above $600. You can deduct the business portion of other animals that you incorporate into learning activities with the children. Ive created an instructional video that answers these questions and many more. She may keep the funds in the bank account as an emergency fund for later use or she can spend it as she wishes. Get more information about KidKare. So, this is not a requirement in Colorado. But, they will reduce your federal and state taxable income. Therefore, my answers below may not be the same answers your state gives you. endobj Ask your tax preparer to advise you. 1 0 obj 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. 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 . Is this deductible? Q: My business is an S Corporation. A: You can use the grant money for all of these items. 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. Q: Can the playground used exclusively for my business be part of the space percentage? 9EJH-E*!PPRs&-L\1%gh7XXjZ/ A: Yes, deduct the time-space% of this cost. As long as you keep records showing you worked these hours, claim all the hours. Q: What do I need to do if I dont think my tax preparer properly paid my Social Security/Medicare taxes? applications for three grant opportunities, totaling $150 million, to help child care programs defray . This blog explores the tax implications of the American Rescue Plan Act (ARPA) Child Care Stabilization Grants for Home-Based Child Care Providers. You can always deduct any expense that is ordinary and necessary for your business. Q: One of my bathrooms was flooded. % A: If you pay your husband you must treat him as an employee and file the W-2, not a 1099. Q: If I pay myself, how much will I owe in taxes? Q: Is there a thing such as too many hours when claiming hours when children are not present in my home? 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. 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: I dont know the answer for your particular state, sorry. A: Its totally up to you how long you want to remain in business or when you want to close. You must recalculate your time-space% each year. Therefore, its not a good idea to pay your husband. A: Yes. Tax Resources from Home Grown. Should I pay myself first with the grant money and then make payments on the vehicle? 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.. A: No! Q: How to I calculate my Time Percent when children are in my care 24 hours a day? These grants are in addition to other pandemic-related relief funds (e.g., CARES grants, Paycheck Protection Program loans, EIDL loans). Please be aware that all funds are taxable and will need to be spent no later than . A: You report the grant as income. Contact your local Child Care Resource and Referral agency to see if there are other grant programs. A: Since these expenses are used by both your business and your family, apply your time-space% to these expenses. This still leaves $2,100 for the provider to spend as she chooses (or save it). Child Care Stabilization Grants The American Rescue Plan Act of 2021 (ARP Act) (Pub. A: I am sorry to hear this. 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? NOTE: Child Care Stabilization Grant payments may be taxable. Is the Child Care Provider Stabilization Grant taxable? L*|29j]NG0Sm59!aI6a}4r. The application process and distribution structure varies from state to state, so check your local government website to confirm application deadlines and important dates. A: Yes, you can pay yourself any amount. How do you determine your salary? Q: My son is a part-time assistance that I dont do payroll taxes for him. In South Carolina, these stabilizations grants are called "SC Building Blocks". ODJFS created the Child Care Stabilization Sub-Grants for these efforts. 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. A: Yes, pay yourself the cost of the project and then spend it on items not covered by the grant. You need to contact your state agency to get an answer. 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. You may use grant funds to pay for an accountant or financial advisor. Discounts, scholarships and refunds are not tax deductible. A: Count the entire room as regularly used as a daycare storage room. Q: Are there any grants available to add on space to my home without getting a loan? 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. Painting is a repair. Example 3: Provider uses some of the grant to pay herself and some for business expenses. A: The EIDL loan is not forgivable, you must pay it back over 30 years. 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. Therefore, you would need to file 1099-Gs to avoid penalties for failure to file (Internal Revenue Code Section 6721) or failure to furnish (6722). 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. A: Some states have different rules about this. 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: Can I use the grant to replace my rock driveway with a paved driveway? The grant opportunities available to the state's early childhood community will help address operating and facility costs, and will support greater access and quality. No! 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. Original URL . Q: You said we should only save our business records for three years. r}#llQU]giI@ EvO8hwdm49IOr0&5C{A+C uL0PL CivWqU,E,cunk~q.c8XJ89pXS}slO++1*wZQI How do I figure the deductions? . 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. If its only used by your business, you can deduct 100% of the cost in one year. KidKare is a comprehensive record keeping program that includes an accounting section that allows you to keep track of all your income and expenses. 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. Under federal guidance, this clearly language clearly applies to a family child care provider, even if she has no employees. oRT@ 66V'aNAS\u8g<05!rzf7M- (bw1RK51 wOffHg]tJ}%NaiIrIV.y3*2w@LIGFIm(IsMv Can I deduct this? And while many childcare providers have opened back up, its been anything but easy. How to Use Child Care Stabilization Grant Funding to Support Your Home-Based Setting. The federal guidance says you should give parents tuition relief, to the extent possible. This is not a requirement. You want to claim this large deduction. Q: My driveway is completely crumbling and could be a safety issue for children and parents coming in and out. After September 30, 2022, no additional CCSG awards will be made. Does that mean I cannot offer a monthly or quarterly bonus? Q: If I start claiming Social Security before my full retirement age, does Social Security look at my gross income or net income to determine if my benefit will be reduced? If they say you cant use it for this purpose, you can pay yourself and then use the money to rewire. This grant signifies a powerful gesture of government support for families and businesses as the economy recovers. A: Having a room used exclusively for your business will greatly increase your time-space%. How does this impact my taxes? A: Yes. How am I doing that? Q: If I use the actual expenses method to claim food expenses in one year, can I switch to using the standard meal allowance method in another year? In response to the COVID-19 public health emergency and its impact on the child care industry, President Biden signed the American Rescue Plan Act of 2021 (ARP Act). 2 0 obj Stabilization Grant Guidance FAQs. Where to find more information Q: I replaced the flooring in my kitchen. You can deduct your food expenses either using the actual expenses method ($68 in your example) or the standard meal allowance method. A: Yes! A: The cost of any item that is used exclusively for your business can be deducted 100%. You dont need to put it in the name of your business. Investing in Iowa's Child Care (IICC) Funding Program This program doesnt just impact parents and childcare providers either. 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. It wont matter if he doesnt sign it. Q: Can I use the Stabilization grant for: Pay my employees life insurance premiums? You will report less income in this situation, but you cant deduct anything that a parent owes you. You cant count repairs if you use the standard mileage method, but you can count repairs if you use the actual expenses method. See this from the AARP website. You can choose which method to use each year. You would report $5,000 as income and $2,000 as an expense, and end up paying taxes on the difference, or $3,000. A: Pay yourself first. These funds give them a lifeline at the perfect time. Q: I did not include the grant I got in 2020 on my 2020 tax return. Paying for weekly house cleaner? You will have to withhold and pay payroll taxes on these amounts. A: I dont know if you state would consider this a major improvement or not. Are the C3 Child Care Stabilization grants taxable? A: If you are self employed, look to see if you file IRS Form 1040SE. Can I pay myself with the EIDL money? There may be other grant programs offered in your state. Q: Does it matter how much income I made this year to use the Stabilization grant to pay myself? 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. dollars for the Child Care Stabilization Grants These grants are to provide financial relief to family child care providers and child care centers to cover business costs associated with COVID-19 and to help stabilize their operations This represents a substantial financial benefit to all child care programs! Then put aside some money in a place that is low risk (bank savings account, short-term bond fund or money market account). Menu. 1099, W-2? Can I add the attic space in my time-space% calculation? Grant awardees will be determined based on provider type and the number of classrooms licensed to operate within each program. There is not law that requires you to stay in business. Q: Where does the grant go on Schedule C? Therefore, if you received a $10,000 grant and paid $4,000 in taxes, you would still have $6,000 left over after paying the taxes. Can I use the grant money for these expenses? Q: How do I find out where to apply for this grant? If you receive these funds, you will be mailed a 1099 form. Q: If my husbands is disabled and collects Social Security Disability Insurance, will it change to regular Social Security when he reaches age 70? A: No! You just pay yourself because you are the owner. A: Its a repair because you didnt remodel the entire kitchen by replacing just the cabinets. Q: In my state the grant money can be used to reimburse expenses back to February 2020. To paint a picture, childcare centers today are facing decreasing revenues due to lower enrollment, higher expenses to operate safely during the pandemic and severe and ongoing staffing difficulties. . What does that do to my time-space%? A: No, you cant decrease wages or benefits to employees during the grant period. Childcare isnt just a family issue, its a business issue. x\n}}XXc;E8qNDVEID1YYq>_>~}S]}Wc]>}Otgo> BV=}}%:}?=wg/o^_]}~wz7>a>nBN\%~\uB*ySF}G}Wa=dj_g='_=Z?J,iMrzsY=m.](&;n_?j-d7mw]6Y],fndy:y$V9M8nt}])6eSCgw\ms19@WaCo$zHOATq~3)S>Y } The application process is straightforward and designed to deliver grant funds directly to Oklahoma child care programs. Program Amount A: You wont have to ask. But, you can pay yourself with the grant money and then buy a new air conditioner. State tax rules apply. It doesnt matter if you havent lost any children. +|>Pv o+$^1-{z(*EW~l3Md Y{'m"7E:OeegN$d8=Jby&afJISI. Law 117-2) that President Biden signed on March 11, 2021 and funding applications are now open. A: No. CARES Act Provides $3.5 Billion in Child Care Relief. If you are considered a hobby, you might not be able to deduct all of your expenses. 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Act of 2021 ( ARP Act ) ( Pub pay your husband you must pay it back over years. 9Ejh-E *! PPRs & -L\1 % gh7XXjZ/ a: Yes, deduct the time-space % only!: Yes, pay yourself with the grant money for this grant a! 500 and another employee $ 500 and another employee $ 500 and another employee $ 300 if they say cant! Most effective way to pay myself first it matter how much will I owe taxes! Same answers your state ] NG0Sm59! aI6a } 4r '' 7E OeegN. An answer all the hours children are not as productive of all your income and expenses replaced!
