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. A: If you pay your husband you must treat him as an employee and file the W-2, not a 1099. How does this impact my taxes? Q: If I pay a neighbor to paint my daycare with cash, how can I record this as an expense? You can deduct the amount you pay your assistant. (wUu4JIvAcA:.*S5kL%4HSx gx(#-ZN(?o]Zmp onB={ 0,1 IU]MCU Q: Is there a thing such as too many hours when claiming hours when children are not present in my home? Claim this as a house repair on Form 8829. The application process is straightforward and designed to deliver grant funds directly to Oklahoma child care programs. A: Yes, you can pay yourself any amount. Buy a new vacuum cleaner, front door porch light, replace old gutters, large kitchen appliances, install a new kitchen island? A: An employee can work fewer hours and that wont impact the grant. All organizations receiving funding must report this as income to your program. endobj Q: If Im on the Food Program I can also use the standard meal allowance rate to deduct food expenses? If it is permanently attached to the land, you must depreciate the business portion of the cost over 39 years. If you are a sole proprietor (self employed), you do not take out payroll taxes before paying yourself. Programs that are awarded a grant will receive an IRS Tax Form 1099-NEC. Q: Can I use the grant money to rewire my home? If the separate building is 40% of the size of the home, then deduct 40% of these costs. Q: If I was closed because I had COVID and didnt have parents pay during that time, how do I record using some of the grant to cover the lost revenue? Q: If someone takes the grant and decides they no longer want to be in daycare, will they have to reimburse the money received? I thought it was seven years. Subsidized Child Care Stipends. Your state may or may not see this as a major improvement. Instead, start making contributions to your IRA. ODJFS created the Child Care Stabilization Sub-Grants for these efforts. Consult with your accountant for more information. Eligibility Application Recertification Questionnaire Training Grant Funds You will then report your wages as income. Q: Can I use the grant money to fully remodel my kitchen, put up new house siding, metal roof, new back deck? A: RI DHS aims to approve two stipends to all eligible providers, depending upon fund availability. x][s8~OUNIS6MxJyzdS3 KY)13ed b6|0-Fiqaps7+y1;? The NJ ARP Stabilization Grants range from $30,000 to $120,000 for licensed child care centers, depending on license capacity, provider type and monthly expenses. Q: What do I need to do if I dont think my tax preparer properly paid my Social Security/Medicare taxes? To receive grant funds, child-care providers must submit an application. This builds on critical down payments on relief . How long do I have to stay in business if I receive stabilization grant funding? KidKare is a comprehensive record keeping program that includes an accounting section that allows you to keep track of all your income and expenses. +|>Pv o+$^1-{z(*EW~l3Md Y{'m"7E:OeegN$d8=Jby&afJISI. A: The PPP and EIDL programs are administered through the Small Business Administration. If he did, then you properly paid your Social Security/Medicare taxes. Replace worn out bedroom carpet and hallway with wood floors? She can pay herself this by noting the payment in her bank records or check register as stabilization payment for myself, for example. Q: In my state the grant money can be used to reimburse expenses back to February 2020. 9EJH-E*!PPRs&-L\1%gh7XXjZ/ Q: If I transferred money to pay myself earlier but sometimes forgot to make a note, can I go back and fix it? Childcare isnt just a family issue, its a business issue. Can I still deduct them as expenses? This grant signifies a powerful gesture of government support for families and businesses as the economy recovers. Using a reimbursement model, management and reporting is easy and takes the burden off your HR team. Q: We are a non-profit preschool facility in our church. A: All non-profits should be filing a tax return, unless your preschool is owned by the children. Z~0^ I5%jE6)jh2!Z4Wq3 Investing in Iowa's Child Care (IICC) Funding Program 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. You would report $5,000 as income and $2,000 as an expense, and end up paying taxes on the difference, or $3,000. You want to know his address so you can send him a Form 1099 at the end of the year. A: Pay yourself first. 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 . Painting is a repair. Supporting Centers in Preparing for Child Care Stabilization Grants A: If you do child care out of your own home, you are entitled to depreciate your home. In general, every licensed or regulated provider is eligible. A: You can deduct your Time-Space% of your utilities. 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. Can I put it on my 2021 tax return? 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 For further guidance on the tax implications of the Child Care Stabilization Grant, please contact your accountant or financial advisor. Q: I use my deck as an outdoor classroom due to COVID. ]ATIGJK5NF5 4 R&a&YFhJl M2z[{F6M6 [1]This amount will depend on the state in which the provider lives. A: If you are self employed, you are filing IRS Form 1040SE which calculates how much Social Security/Medicare tax you owe. But childcare providers have been really struggling to stay afloat, and many have resorted to taking on personal debt to get by or temporarily closing altogether. Q: What criteria is my state using to approve the Stabilization grants? The government has taken notice, and their answer is The Child Care Stabilization Grant, part of the American Rescue Plan Act (ARPA). Grant funds are not a loan that need to be paid back. But, you can pay yourself with the grant money and then buy a new air conditioner. 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. ); 45 CFR Parts 98 and 99; The American Rescue Plan (ARP) Act of 2021 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. Child Care Grant: Phase 4. Afterwards it costs $99.00 a year. This is unsustainable for many reasons. $3,500 income $3,500 expenses = $0 taxable income and $0 taxes owed. A: You report the grant as income. Find Stabilization Grant Applications for your State or Territory. Q: I refunded two weeks of care for a family that had to quarantine. This bill, based on President Biden's bold American Rescue Plan, provides $39 billion in desperately needed child care relief funding. The Child Care Stabilization Grant is income to your business and is taxable by the state and federal government. What dates matter for the child care stabilization grant? You should spend all the grant money, either on equipment, supplies and other operating expenses, or give the staff and director a bonus. On March 4, 2020, the Governor declared a State of Emergency in California in response to COVID-19. x\n}}XXc;E8qNDVEID1YYq>_>~}S]}Wc]>}Otgo> BV=}}%:}?=wg/o^_]}~wz7>a>nBN\%~\uB*ySF}G}Wa=dj_g='_=Z?J,iMrzsY=m.](&;n_?j-d7mw]6Y],fndy:y$V9M8nt}])6eSCgw\ms19@WaCo$zHOATq~3)S>Y } A: You can claim expenses for your vehicle using either the standard mileage method or the actual expenses method. 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. s,[[1c!yOOH-Nr As long as you keep records showing you worked these hours, claim all the hours. Q: My business is an S Corporation. 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. Original URL . <>/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>> If you do sign up, please use the referral code 0659. Q: Can I pay myself in a lump sum or spread it out weekly or monthly? A: You can count all hours that you work in your home, either caring for children or doing other business activities. 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. 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. You can deduct the business portion of other animals that you incorporate into learning activities with the children. Such a record could say, February 23, 2022 - $4,000 pay myself with the Stabilization grant.. Stabilization Grant Guidance FAQs. A: You can count all the hours children are present in your home. 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. While each state, territory, or tribe can specify the specific uses of grant funds, the funds are intended to support providers general operating expenses, wages and benefits to employees and owners, rent, utilities, cleaning and sanitation supplies and services, and other goods and services needed to maintain or resume operations as well as mental health supports for children, families, and employees. Paying for weekly house cleaner? Q: Can I replace my kitchen flooring because it is cracking and some of the vinyl is breaking up? A: You can apply some of the grant money to cover lost revenue, but you cant deduct lost revenue as a business expense. A: This language does not mean you are required to use the grant money to lower your tuition. Each state will determine how much a provider will receive based on a criteria they have developed. Mifflintown, PA 17059. A: You can use the grant money directly for these expenses. A: If its not permanently attached to the land you can deduct the business portion of the cost. The following definitions of program terms shall be used in interpreting WV Child Care Stabilization Grant Program policy: 1.1.1. <>/ExtGState<>/XObject<>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI] >>/Annots[ 15 0 R 21 0 R 22 0 R 23 0 R 30 0 R 31 0 R 32 0 R 34 0 R 35 0 R 36 0 R 37 0 R 38 0 R 39 0 R 40 0 R 42 0 R 43 0 R 44 0 R 45 0 R 46 0 R 47 0 R 49 0 R 50 0 R 51 0 R 52 0 R 53 0 R 54 0 R 55 0 R 56 0 R 57 0 R 58 0 R 59 0 R 61 0 R 62 0 R 63 0 R 64 0 R 65 0 R 66 0 R 68 0 R 69 0 R] /MediaBox[ 0 0 612 792] /Contents 4 0 R/Group<>/Tabs/S/StructParents 0>> This presents an administrative challenge for using grant funds, because if you dont do it correctly you may lose your funds. 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. 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. Get more information about KidKare. It is also important for providers to know that not all business expenses are fully tax deductible. Example 2: Provider uses full amount for business expenses Ive created an instructional video that answers these questions and many more. A: No. The grants cannot be used for new construction or major renovations. Help is on the way! Are these expenses tax deductible? You must treat people who help you care for children as your employees, subject to all the payroll taxes. For most providers, this would be about 30-40% in taxes. Rates are reflective of the different costs associated with each program size. Using Child Care Stabilization Grant funds to pay federal taxes is not an allowable expense. around the country, mostly small businesses, who were already operating on thin margins. 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. Not all applications are guaranteed to be approved. Q: Is a new roof a major or minor repair? 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. Regarding federal tax rules, please contact your tax preparer or the Internal Revenue Service for guidance. This report provides a state-by-state overview of FFN policies and supports and highlights some examples of the ways in which states and local entities are supporting FFN providers who serve isolated families with low incomes. 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? No. endobj Q: How do I pay myself for the hours I work in the weekends or after work hours? Q: If my husbands is disabled and collects Social Security Disability Insurance, will it change to regular Social Security when he reaches age 70? Check with your state agency about this grant question. The second child care stabilization grant was released on July 5, 2022. You do not have to pay back the Stabilization grant. Q: If I am on payroll, can I still transfer money to my personal account to pay myself? A: Yes, deduct your time-space% of the cost in one year. Q: Are the Stabilization grants available in Canada? A: No. The following examples are meant to illustrate the different ways in which a family child care provider might utilize the grant and the tax implications of each scenario. Tom Copelands Blog: Taking Care of Business We can provide technical assistance and have brief training videos and materials available to help complete the process. 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