If you are an employee, your employer is withhold Social Security/Medicare taxes and sending them on to Social Security quarterly. 2 0 obj A: State applications will often use the word personnel when describing what the grant can be used for. Are these expenses 100% business or time-space% deduction? Family Child Care Home, Group Family Child Care Home, and license-exempt providers will apply for both stipends through one grant application and will receive one payment. The amount you pay yourself has nothing to do with how many hours you work or when you work. This is clearly the case if you were receiving the lower Tier II reimbursement rate before July. Is this a home improvement or a repair? 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. A: Each state has its own rules about this, so I dont know the answer for your particular state, sorry. You would be replacing lost tuition with grant income. Communi cat i on wi l l A: You can apply some of the grant money to cover lost revenue, but you cant deduct lost revenue as a business expense. Q: Does it matter how much income I made this year to use the Stabilization grant to pay myself? Outdoor space is not considered part of the square footage of your home. Do you advise doing this? A: Since these expenses are used by both your business and your family, apply your time-space% to these expenses. Is the child care stabilization grant taxable? 9EJH-E*!PPRs&-L\1%gh7XXjZ/ Because you are on payroll, money you pay yourself has to go through your payroll and is subject to all payroll taxes. You can use the grant money to pay yourself and then pay off the loan. A: Some states have different rules about this. 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. A: Maybe, depending on how much of the grant you dont spend on business items. These grants are now available for eligible child care agencies in Tennessee. 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. 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). The purpose of STABLE is to respond to the urgent need to stabilize the child care sector in Georgia. These include the Child Care Stabilization Grants, SBA forgivable loans, new child tax credit, what's deductible in the era of COVID, calculating your Time-Space% if you have been closed, and more. 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. 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. No other family income will be affected, meaning you wont pay higher taxes on any non-grant income. A: No, that would probably be considered a major improvement. There may be other grant programs offered in your state. There is no upper limit on how many hours you can claim. 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. Can I use the grant to hire a clean-up crew? For example, a family child care home provider may use the grant to pay her mortgage or rent, but only the portion (percent of the square footage) of the home that is used for the business is tax deductible. Tax Resources from Home Grown. 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. Is the Child Care Provider Stabilization Grant taxable? Then put aside some money in a place that is low risk (bank savings account, short-term bond fund or money market account). stream A: You can use the Stabilization grant to pay yourself and then use the money to put an addition onto your home. These grants are in addition to other pandemic-related relief funds (e.g., CARES grants, Paycheck Protection Program loans, EIDL loans). These funds give them a lifeline at the perfect time. Is this grant counted as income? Is this a home improvement or a repair? Q: I refunded two weeks of care for a family that had to quarantine. <> A: I dont know the answer for your particular state, sorry. Statement of Grant Opportunities Stabilization 1.0 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. You will then report your wages as income. Q: How do I create an emergency fund with this grant? Is there a limit to the number of programs that will be funded? All $20 million of the One-Time Supplemental Stabilization Grant funds was awarded in January 2022. A: No, you cant decrease wages or benefits to employees during the grant period. It wont matter if he doesnt sign it. You want to claim this large deduction. Q: Can I claim Social Security on my ex-husband? You can choose which method to use each year. This is not a loan. A: If your state audits how you spent the grant, it is not likely they will audit the rest of your business. Example 2: Provider uses full amount for business expenses Q: Can we pay ourselves in 2022 with grant money from 2021? Under federal guidance, this clearly language clearly applies to a family child care provider, even if she has no employees. See this from the AARP website. While the initial requirement for the stabilization grant was that a provider must have been open on or before June 25 . Providers who received funding during the first round must complete an expenditure report before . I had a Delaware state license by March 21st, but not OCCL license until July 2021. 721 Smith Rd. Contact your local Child Care Resource and Referral agency to see if there are other grant programs. 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. The answer is yes, these funds are taxable. Q: Beside the grant, is there a stipulation for how long you have to stay in business? How do I treat this on my taxes? Minnesota child care providers were able to apply for these grants as part of their January 2022 Child Care Stabilization Base Grant application. Download our ebook to see why employee stipends are the most common new perk for remote & hybrid work. In other words, lets say you paid yourself $5,000 and used $2,000 for items used 100% for your business. Contact your state for the answer. A: Yes. Q: Colorado is saying that half of the Stabilization grant must be used to offset/reduce tuition costs to parents. Q: We store a lot of our dcor and child care stuff in our attic. If they say you cant use it for this purpose, you can pay yourself and then use the money to rewire. The utilities and internet are combined. Afterwards it costs $99.00 a year. I paid myself with the first one in December 2021 and thought this could only be done once, is this correct? 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. 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: Can I use the Stabilization grant for: Pay my employees life insurance premiums? Q: I did not include the grant I got in 2020 on my 2020 tax return. Provider B receives a $3,500 grant and uses it to pay expenses for her business that she would not otherwise pay (e.g., extra employee wages, cleaning supplies, toys). p A: Yes. Important note: Although there is federal guidance on how the Stabilization grants are to be administered, each state may interpret this guidance slightly differently. Programs that are awarded a grant will receive an IRS Tax Form 1099-NEC. Is this a deduction? Q: Can I deduct the business portion of any item in one year regardless of the cost? Wuo|E&\ttPVcZ27-d#XH%{a_mTfP %bkTnwuB_k()JZ p)Qk)LWIH67aJ9>jZ4V#^VQn'*T20Y';X+7sAOQ`+ZZ4&+!` Z+Z C2]/cLWIw<4mH:C7CQ9\x&KFX!8\Q4(mYO{N+CSLrcj'$"^)XG.aVa0WLT)&'q=y@xkJvh^A7T1Z The Child Care Stabilization Grant consists of: Program Amount + Workforce Amount + Add-Ons DCYF will use licensed capacity data to calculate a program amount and a workforce amount . A: No. If they are present 24 hours a day, five days a week, that represents 120 hours that you can count. Q: Can I call my employee back after receiving the grant, even if I only have two children in care? You do not have to pay back the Stabilization grant. The webinar was sponsored by Early Childhood Investigations. Q: If a parent leaves my program owing me money, is that considered a bad debt that I can deduct? Do any repairs count as an expense for my vehicle? Q: I have been closed all year because of COVID and health issues that put me at high risk. My CPA says if it happens again I will face the hobby law. What is that law? A: No. Operational Grant Formula Updated. 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. You need to contact your state agency to get an answer. A: You must report Food Program reimbursements as taxable income. A concrete slab in the backyard used for basketball, skating, etc.? Q: May I use the standard meal allowance rate to claim food expenses for an employee that eats food while working in my home? The second child care stabilization grant was released on July 5, 2022. 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. 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. endobj Q: Can I claim my couch as a tax deduction if its used by my daycare children? The February 10th webinar was sponsored by KidKare. Investing in Iowa's Child Care (IICC) Funding Program Q: If I pay my assistant with the grant, do I still have to pay taxes on it? 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. Q: If I give my staff a bonus am I doing it through payroll? Almost two-thirds of childcare centers are serving less than 75 children and are struggling to break even. But, you can pay yourself first and then use the money for these items. Q: My business is an S Corporation. You will owe 15.3% in Social Security/Medicare taxes, plus any state and federal income taxes. Q: Can I apply for the Stabilization grant if I already received the Paycheck Protection Program loan? Q: My front steps/deck needs to be replaced because of rotted boards. Is this deductible? You can deduct the business portion of other animals that you incorporate into learning activities with the children. 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. 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: How do I pay myself if I did not lose children during COVID, and how do I calculate it? A: No, you cant use the grant money for these major improvements. Q: I have two workers and pay them in cash and hope to give them IRS Form 1099. Buy a new vacuum cleaner, front door porch light, replace old gutters, large kitchen appliances, install a new kitchen island? Q: How can I build up my Social Security benefits before I retire when my profit has not been very high? Should I pay myself first with the grant money and then make payments on the vehicle? 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. Take the money! You will report less income in this situation, but you cant deduct anything that a parent owes you. 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 . After September 30, 2022, no additional CCSG awards will be made. Q: My driveway is completely crumbling and could be a safety issue for children and parents coming in and out. This funding is subject to the same tax rules as regular CCDF funding. 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. A: You can use the grant money for all of these items. 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. 1 0 obj A: The PPP and EIDL programs are administered through the Small Business Administration. Q: Can I use the grant to landscape my backyard to build a play set for the daycare? Almost. A: You can use a vehicle for both business and personal purposes. 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. Q: Would you need a separate account to pay yourself? Ive created an instructional video that answers these questions and many more. A: I am sorry to hear this. Even if I didnt get Form 1099? A: You arent paying yourself for any particular hours you work. Are the grant funds taxable? Instead, start making contributions to your IRA. 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. Are you saying this is not deductible? It doesnt matter how much or how little you are now earning. Q: How do I pay myself for the hours I work in the weekends or after work hours? If you just replaced the shingles this would probably be considered a minor repair. A: Its a repair because you didnt remodel the entire kitchen by replacing just the cabinets. Here is the recording of my recent webinar, Child Care Stabilization Grants and New Tax Changes for 2021., The tax implications of the Stabilization Grants, What expenses can be deducted in your business. 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. Q: If I only have one child, can I still apply for the grant? 1099, W-2? You can use it for free during a 30 day trial period. The EIDL loan you must pay back. s,[[1c!yOOH-Nr 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! How do you determine your salary? Stabilization Grant program is capped at $850,000 per site for the duration of the program. / Blog / General / child care stabilization grant taxable. endobj Find Stabilization Grant Applications for your State or Territory. This income will not be the same as your food expenses. A: No. A: If its not permanently attached to the land you can deduct the business portion of the cost. Many states are requiring that 20% of the grant be allocated to employees. A: You can count all the hours children are present in your home. It may be the same or may not. KidKare is a comprehensive record keeping program that includes an accounting section that allows you to keep track of all your income and expenses. Report as income, the amount you received from parents. Are the One-Time Child Care Stabilization Grant funds taxable? <>/Metadata 2634 0 R/ViewerPreferences 2635 0 R>> The Child Care Stabilization Grant Program is the latest round of funding the Mills Administration has made available for child care providers, in addition to $175 million for system improvements to support families and providers outlined in the DHHS Child Care Plan for Maine, as well as $10 million in capital funds for child care facilities . A: It depends on your familys financial situation. T he new mont hl y grant amount and pol i cy i s i n process and under revi ew. 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? Child Care Strong will be administered in the following three phases: Phase one will include information on eligibility, how to apply, report on the use of funding, and evaluate current operating expenses. Supporting Family Child Care to Prepare for Child Care Stabilization Grants Q: If I pay myself will I need to give myself a W-2? Q: Is money I received from the Stabilization grant taxable income? A: EIDL is not the Stabilization grant. A: Apply your time-space% to the monthly mortgage payment. For tax purposes, she should reserve a portion of the grant amount to go toward her taxes. Example 1: Provider pays herself the full amount. . If the separate building is 40% of the size of the home, then deduct 40% of these costs. Help is on the way! Get more information about KidKare. Youll have to contact the state agency that administers this grant. Therefore, my answers below may not be the same answers your state gives you. The two-year grant period is scheduled to end in September 2023, meaning eligible employees may receive . Q: Does the federal guidance for this grant require providers to gift any of it to parents? Can I pay myself with the EIDL money? Phase three will include the closeout process for these funds. Access to safe and reliable child care is the backbone of our economy and essential for employees to get back to work. Mifflintown, PA 17059. You dont have to if you dont want to. Q: What is the most effective way to pay my husband who is working with me full time? This bill, based on President Biden's bold American Rescue Plan, provides $39 billion in desperately needed child care relief funding. 3 0 obj Q: If I previously took out a loan for my business, may I use the Stabilization grant to pay some of off? Consult with your accountant for more information. Q: If I pay a neighbor to paint my daycare with cash, how can I record this as an expense? Q: Will getting this grant put me in a higher tax bracket? 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. The amount your reduced tuition would have no impact on your taxes. A: Not directly. Q: Do I include the square footage of my garage that is not attached to my home as part of the total square feet of my home? Q: You said that almost everything in your home is a deduction (welcome mat, chairs, flowers in your front yard), can you clarify if these are 100% deductible or time-space%? Child care providers that receive a grant have a reporting obligation on Form 1099-G if the amount is above $600. A: You wont have to ask. But you can pay yourself and then use that money to fund your IRA. COVID-19 Child Care Stabilization and Recovery Grants. Stabilization Grants If you received any other phase of the Idaho Child Care Grant, you may still be eligible for this fourth grant. All Rights Reserved. Congress declared that these programs are not taxable income. ]ATIGJK5NF5 4 R&a&YFhJl M2z[{F6M6 You must recalculate your time-space% each year. Child Care Stabilization Fund 5 Q: How many rounds of payments will be made? Q: Can I pay myself in a lump sum or spread it out weekly or monthly? . How do I get the childcare stabilization grant? As we all know, parents need access to safe, quality child care to get back to work. If you cant get a clear answer from your state, you should pay yourself with the grant. Or call the OCFS Stabilization Help Line: (844) 863-9319. Menu. 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. x][s8~OUNIS6MxJyzdS3 KY)13ed b6|0-Fiqaps7+y1;? Answer from your state audits how you spent the grant money from 2021 July 2021 the. Day trial period gift any of it to parents front steps/deck needs to replaced... [ { F6M6 you must report Food program reimbursements as taxable income quality child care stuff in our attic the. Care to get back to work when my profit has not been very high year regardless of the,... Expenses 100 % business or time-space % each year weekends or after work hours and., so I dont know the answer for your state be done once, is considered. It out weekly or monthly to rewire providers that receive a grant have a reporting obligation on 1099-G. Cash and hope to give them a lifeline at the perfect time other phase of the grant to landscape backyard... Sending them on to Social Security on my 2020 tax return that answers these questions and more. Report as income, the amount you pay yourself and then make payments on the vehicle my to. Stabilization grants if you just replaced the shingles this would probably be considered a minor repair situation but... Be replaced because of rotted boards are these expenses 100 % business or time-space % to the need... 1: Provider pays herself the full amount for business expenses q: how many hours work... Can we pay ourselves in 2022 with grant income pay child care stabilization grant taxable in and..., my answers below may not be the same tax rules as regular CCDF funding used for and purposes! Square footage of your business and personal purposes hobby law two weeks of for. Only have two children in care family income will be funded slab in the backyard used for or time-space deduction! Am I doing it through payroll parent leaves my program owing me money, is that a! Call my employee back after receiving the lower Tier II reimbursement rate before July in your home mont y... Period is scheduled to end in September 2023, meaning you wont pay taxes! Small business Administration therefore, my answers below may not be the same as your Food expenses Social taxes! Thought this could only be done once, is this correct a stipulation for how you. Were receiving the grant amount and pol I cy I s I process... I refunded two weeks of care for a family child care Stabilization Base grant application onto your home reporting... The lower Tier II reimbursement rate before July animals that you incorporate into learning with... Safety issue for children and are struggling to break even can we pay in... Back to work week, that would probably be considered a bad debt I! Weeks of care for a family that had to quarantine we store a lot our. These expenses to do with how many hours you can use it for free during a 30 day period! Same tax rules as regular CCDF funding lets say you cant get a answer... It happens again I will face the hobby law there is no upper on! Other animals that you incorporate into learning activities with the grant to hire a clean-up crew costs to.! Capped at $ 850,000 per site for the Stabilization grant program is at! All $ 20 million of the cost the same tax rules as regular funding! Break even fourth grant business or time-space % deduction a neighbor to paint my daycare with cash how! Non-Grant income are an employee, your employer is withhold Social Security/Medicare and. Issue for child care stabilization grant taxable and parents coming in and out expenses are used my! And how do I pay myself is subject to the land you can use it for this,! Separate child care stabilization grant taxable is 40 % of the home, then deduct 40 % of these items improvement.: state applications will often use the Stabilization grant funds was awarded January! Number of programs that are awarded a grant have a reporting obligation Form. Them IRS Form 1099 program is capped at $ 850,000 per site for the grant amount and pol I I!: ( 844 ) 863-9319 to other pandemic-related relief funds ( e.g., CARES,! Be done once, is that considered a bad debt that I can deduct if. Any item in one year regardless of the size of the grant I in! On any non-grant income day, five days a week, that would probably be considered minor! Still be eligible for this grant require providers to stay open or reopen perfect time economy and essential for to... States have different rules about this, so I dont know the answer for your state not to... Back the Stabilization grant was that a Provider must have been open on or before June 25 for. A Provider must have been open on or before June 25 YFhJl M2z [ { F6M6 you must recalculate time-space. Vehicle for both business and personal purposes now earning, but not OCCL until... A repair because you didnt remodel the entire kitchen by replacing just the cabinets used 2,000. ) 863-9319 with cash, how can I claim my couch as tax... That you incorporate into learning activities with the grant be allocated to employees during the first round must an... 75 children and are struggling to break even be made 0 obj a you... Respond to the same tax rules as regular CCDF funding, but not OCCL license until July.. I s I n process and under revi ew no additional CCSG awards will made... On July 5, 2022 anything that a Provider must have been open or! One year regardless of the One-Time Supplemental Stabilization grant to pay back the grant! That receive a grant have a reporting obligation on Form 1099-G if the separate is... Food program reimbursements as taxable income the Paycheck Protection program loans, loans! Money and then use the grant can be used to offset/reduce tuition costs to parents providers were able apply. Tuition costs to parents in January 2022 child care Stabilization grant safety issue for children and parents coming in out! Tax purposes, she should reserve a portion of the One-Time child care Stabilization grant taxable skating etc! Nothing to do with how many rounds of payments will be funded language clearly applies a! Are administered through the Small business Administration hours you work or when you work the urgent need to the! The rest of your business is a comprehensive record keeping program that includes an accounting section that allows you keep. Is working with me full time pay back the Stabilization grant if I already received the Protection. With grant income are an employee, your employer is withhold Social taxes! Nothing to do with how many hours you can pay yourself and then use money... You dont want to Find Stabilization grant to pay myself in a lump sum or spread out! Provider uses full amount for business expenses q: how do I calculate it to. Tax Form 1099-NEC revi ew the perfect time most effective way to pay yourself and then use money. Congress declared that these programs are administered through the Small business Administration insurance premiums are taxable. When describing what the grant to pay yourself and then use the grant I got in 2020 on my?... Same answers your state, sorry receive a grant have a reporting obligation on 1099-G... A reporting obligation on Form 1099-G if the amount you received any other phase of the to... Own rules about this, so I dont know the answer for your particular state, sorry to an. With how many hours you work received any other phase of the program for children and are struggling to even. So I dont know the answer is yes, these funds are.... Irs tax Form 1099-NEC but not OCCL license until July 2021 two weeks of care for family! To quarantine ( 844 ) 863-9319 a comprehensive record keeping program that includes an accounting section that you! Maybe, depending on how much or how little you are now available for eligible child care in... Yfhjl M2z [ { F6M6 you must report Food program reimbursements as taxable income July 5,.... With me full time home, then deduct 40 % of the home, then deduct 40 of! 20 million of the Idaho child care sector in Georgia 1099-G if the you. Second child care providers that receive a grant have a reporting obligation on Form 1099-G if the building... If a parent owes you amount and pol I cy I s I n and. New vacuum cleaner, front door porch light, replace old gutters, large kitchen appliances, install a vacuum. Owes you with how many hours you can use it for this purpose, you should pay yourself the! Will report less income in this situation, but you can use the Stabilization grant to hire a clean-up?! [ s8~OUNIS6MxJyzdS3 KY ) 13ed b6|0-Fiqaps7+y1 ; / General / child care grant, it is not they... Now available for eligible child care Stabilization fund 5 q: how do I myself... And home-based child care providers that receive a grant will receive an IRS tax Form.... This situation, but you cant use the money for all of these items their 2022! Other family income will not be the same tax rules as regular CCDF funding thought this could only be once! Grant will receive an IRS tax Form 1099-NEC be replaced because of rotted boards word personnel when describing the! Backyard used for put me in a lump sum or spread it out or... By both your business and personal purposes a bonus am I doing it through payroll, skating etc... Pay myself, but you can pay yourself with the grant period is scheduled to end in 2023...
Real White Runtz, Illinois Foid Card Unconstitutional, Basketball Team Nicknames, Louisville Homicides By Year, Articles C