No. 2 0 obj There is no upper limit on how many hours you can claim. 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. endobj Consult your state for the answer. If so, how do I do this? Q: Will getting this grant put me in a higher tax bracket? Q: You said I could offer employees a one-time bonus. For all of the above answers that were No, you can still pay yourself and then use the money for these purposes. 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? Good news - Child Care Relief Funding 2022 is here! Why does the child care stabilization grant matter? A: State applications will often use the word personnel when describing what the grant can be used for. You can use it for free during a 30 day trial period. Investing in Iowa's Child Care (IICC) Funding Program Contributions to an IRA will not reduce your Social Security/Medicare taxes. This is clearly the case if you were receiving the lower Tier II reimbursement rate before July. Not all applications are guaranteed to be approved. The purpose of STABLE is to respond to the urgent need to stabilize the child care sector in Georgia. Q: On my grant report I listed mortgage and utilities as expenses. These grants are in addition to other pandemic-related relief funds (e.g., CARES grants, Paycheck Protection Program loans, EIDL loans). Supporting Family Child Care to Prepare for Child Care Stabilization Grants Q: I did not include the grant I got in 2020 on my 2020 tax return. On another slide it says that state grants are taxable income. 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. How long do I have to stay in business if I receive stabilization grant funding? A: An employee can work fewer hours and that wont impact the grant. Can I use the grant to hire a clean-up crew? endobj Providers who received funding during the first round must complete an expenditure report before . A: Colorado says they encourage providers to give 50% to parents. A: I am sorry to hear this. Q: Where does the grant go on Schedule C? See how Compt can help you and your employees utilize these federal funds: Schedule a Demo: Our customers have figured out how: lifestyle spending accounts! You will always be better off financially after taking a grant, even if it increases your taxes. Outdoor space is not considered part of the square footage of your home. Q: Is the Paycheck Protection Program (PPP) taxable income? Is there a limit to the number of programs that will be funded? The EIDL loan you must pay back. Minnesota child care providers were able to apply for these grants as part of their January 2022 Child Care Stabilization Base Grant application. 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. If you are an employee, your employer is withhold Social Security/Medicare taxes and sending them on to Social Security quarterly. This program doesnt just impact parents and childcare providers either. Q: Can I use the Stabilization grant to replace my old central air condition unit? 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: If you are self employed, you are filing IRS Form 1040SE which calculates how much Social Security/Medicare tax you owe. How am I doing that? 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. support provi ders unt i l June 2024. Stipulations for what the funds can be spent on and how to properly report them. Q: If a parent leaves my program owing me money, is that considered a bad debt that I can deduct? 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: How do I know how much I can ask for the grant? <> A: No. OCFS has awarded $208 million to 12,578 child care providers through the Stabilization 2.0 for Workforce Supports grant. Q: Can I use the grant to landscape my backyard to build a play set for the daycare? A: Yes. 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. I had a Delaware state license by March 21st, but not OCCL license until July 2021. You just pay yourself because you are the owner. You would be replacing lost tuition with grant income. The government has taken notice, and their answer is The Child Care Stabilization Grant, part of the American Rescue Plan Act (ARPA). Is this deductible? A: You must report Food Program reimbursements as taxable income. But, you can pay yourself first and then use the money for these items. Using Child Care Stabilization Grant funds to pay federal taxes is not an allowable expense. 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 include it either on line one (Gross receipts) or line six (Other Income). Grant funds are not a loan that need to be paid back. 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. When childcare providers struggle, this creates a ripple effect in the economy when families cant get childcare. The webinar highlighted tools to help apply for the . 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. You will then report your wages as income. Youll have to contact the state agency that administers this grant. On April 9, 2021, the Delaware Department of Health and Social Services and the Delaware Department of Education announced that the Delaware Early Education and Child Care Stabilization Fund will provide $66,752,816 in direct grants to support eligible early child care professionals across Delaware. The grants cannot be used for new construction or major renovations. KidKare is a comprehensive record keeping program that includes an accounting section that allows you to keep track of all your income and expenses. The amount your reduced tuition would have no impact on your taxes. 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. Should I pay myself first with the grant money and then make payments on the vehicle? Subsidized Child Care Stipends. Are the grant funds taxable? %PDF-1.7 <>/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>> stream A: Having a room used exclusively for your business will greatly increase your time-space%. ]ATIGJK5NF5 4 R&a&YFhJl M2z[{F6M6 Biden's American Rescue Plan allotted $39 billion, which included $15 billion for a grant program and $24 billion for a child . And while many childcare providers have opened back up, its been anything but easy. T he new mont hl y grant amount and pol i cy i s i n process and under revi ew. 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). Q: If I was audited, would they just audit my grant or my entire business? oRT@ 66V'aNAS\u8g<05!rzf7M- (bw1RK51 wOffHg]tJ}%NaiIrIV.y3*2w@LIGFIm(IsMv 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. 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. See the funding breakdown by state, tribe, and territory, and more information about the grant on the. A: You can deduct your Time-Space% of your utilities. Painting is a repair. child care, child and adult protective services, adoption, and child support services. Q: On one slide it says that the PPP and EIDL programs are not taxable income. No. This presents an administrative challenge for using grant funds, because if you dont do it correctly you may lose your funds. Thats just how the law works, some are taxable, some are not. You will report less income in this situation, but you cant deduct anything that a parent owes you. 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 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. 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. Child Care Stabilization Grants The American Rescue Plan Act of 2021 (ARP Act) (Pub. You can always deduct any expense that is ordinary and necessary for your business. This change will be effective through September 30, 2023. Does that mean I cannot offer a monthly or quarterly bonus? 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 ! Workforce Innovation Sustain Child Care Subsidy Operations Start-up & Expansion Paycheck Protection Retention of Child Care Staff Child Care Stabilization Fund 5 Q: How many rounds of payments will be made? If you do, the amount that you lower your tuition is not tax deductible. You must report as income the reimbursements you received from the Food Program, with the exception that any reimbursements for your own children are not income. A: No, you cant decrease wages or benefits to employees during the grant period. Can I reallocate some of this money so I dont have to pay income taxes? A: Yes! A: Yes, under certain circumstances. 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. Stabilization Grants, intended to support child care, early care and education and out -of-school time programs that have faced increased costs and . Once you do that, you can then spend the money on a new roof. All organizations receiving funding must report this as income to your program. A: EIDL is not the Stabilization grant. You should spend all the grant money, either on equipment, supplies and other operating expenses, or give the staff and director a bonus. On the vehicle must report Food program reimbursements as taxable income my business! That you lower your tuition is not considered part of the above answers that no! That, you cant decrease wages or benefits to employees during the first round must complete an report! 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