A: Not directly. Report as income, the amount you received from parents. CARES Act Provides $3.5 Billion in Child Care Relief. 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. $3,500 income $3,500 expenses = $0 taxable income and $0 taxes owed. If you are a non-profit or not-for-profit organization, this funding is tax exempt. This builds on critical down payments on relief . 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. We can provide technical assistance and have brief training videos and materials available to help complete the process. 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? 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? Q: Can I pay myself in one lump sum or do I have to pay myself weekly or biweekly? Check with your state agency about this grant question. Is this a home improvement or a repair? Q: If I transferred money to pay myself earlier but sometimes forgot to make a note, can I go back and fix it? Q: If I have staff can I still pay myself the whole amount? Q: Can I use this grant to pay myself? endobj Original URL . No. You do not have to pay back the Stabilization grant. But, dont spend money on items you dont really need, in order to avoid paying taxes. 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. Q: Can I use the Stabilization grant to replace my old central air condition unit? If you do, the amount that you lower your tuition is not tax deductible. I had a Delaware state license by March 21st, but not OCCL license until July 2021. Q: Can I use the grant to replace my rock driveway with a paved driveway? 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. Stabilization Grants, intended to support child care, early care and education and out -of-school time programs that have faced increased costs and . Q: You said we should only save our business records for three years. 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 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. T he new mont hl y grant amount and pol i cy i s i n process and under revi ew. You must treat people who help you care for children as your employees, subject to all the payroll taxes. Distributing the funds to employees (most states require a portion of grant funds to be paid out to employees)? 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. Yes. In a recent webinar hosted by the Office of Child Care Technical Assistance Network, national family child care business expert Tom Copeland provided an overview of the stabilization grants and how family child care homes can handle the tax implications. A: Only if you already have a post-secondary degree. . But, they will reduce your federal and state taxable income. Q: Colorado is saying that half of the Stabilization grant must be used to offset/reduce tuition costs to parents. But, you can pay yourself first and then use the money for these items. Contact your state to get the answer. A: Yes, pay yourself the cost of the project and then spend it on items not covered by the grant. Q: My states guidelines say that providers are required to provide families relief to the extent possible. For example, charging less tuition to assist parents. These grants are in addition to other pandemic-related relief funds (e.g., CARES grants, Paycheck Protection Program loans, EIDL loans). You can use it for free during a 30 day trial period. Q: Does going back to college count as hours? K.4jq%E$ZT^:D+0mdEdUW#b=C\2CQ&j,AP5JRYMHj*6v)5oI DWH Buy a new vacuum cleaner, front door porch light, replace old gutters, large kitchen appliances, install a new kitchen island? Q: We are a non-profit preschool facility in our church. Subject: Child Care Stabilization Grants Appropriated in the American Rescue Plan (ARP) Act (Public Law 117-2) signed into law on March 11, 2021. KidKare is a comprehensive record keeping program that includes an accounting section that allows you to keep track of all your income and expenses. Dental crown not covered by insurance? For tax purposes, she should reserve a portion of the grant amount to go toward her taxes. Child care has received $54 billion since the start of the pandemic. Supporting Family Child Care to Prepare for Child Care Stabilization Grants Phase three will include the closeout process for these funds. You will have to withhold and pay payroll taxes on these amounts. <> <>/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>> This is unsustainable for many reasons. Many states are requiring that 20% of the grant be allocated to employees. Q: Does it matter how much income I made this year to use the Stabilization grant to pay myself? 2 0 obj Funds must be used to support the key operating expenses of child care providers to help ensure access to child care for families. 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! Can I give him a $500 bonus? Q: Because of all my deductions I did not show a profit for three years. The second child care stabilization grant was released on July 5, 2022. Q: Does the federal guidance for this grant require providers to gift any of it to parents? Grant funding amounts and distribution schedule. You will report this as income and pay Social Security/Medicare taxes as well as federal and state income taxes on this income. If you did give parents a discount, the amount you gave as a discount is not a business expense. 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! 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? (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. Q: Is the Stabilization grant taxable income? A: Yes! A: Pay yourself first. For further guidance on the tax implications of the Child Care Stabilization Grant, please contact your accountant or financial advisor. 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. Adhering to your states unique spending and reporting requirements for funds that are part of the grant through the Office of Child Care. 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. Using Child Care Stabilization Grant funds to pay federal taxes is not an allowable expense. Please call us at (315) 446-1220. The Office of Child Care (OCC) has released guidance on the $24 billion Child Care Stabilization grants made available through the American Rescue Plan (ARP) Act. A: No, because paying yourself does not create a deduction. If you are a sole proprietor (self employed), you do not take out payroll taxes before paying yourself. What is the SC Building Blocks Grant? ]ATIGJK5NF5 4 R&a&YFhJl M2z[{F6M6 Q: I understand I cant lower my employees wages, but what if the employee wants to work fewer hours? Q: If I pay my assistant with the grant, do I still have to pay taxes on it? Q: My front steps/deck needs to be replaced because of rotted boards. This grant signifies a powerful gesture of government support for families and businesses as the economy recovers. Child Care and Development Fund (CCDF) Home Visiting; . Example 1: Provider pays herself the full amount. A: Some states have different rules about this. A: Yes, with the exception of a home, home improvement or home addition. 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%? Q: Can I pay myself any amount? Because you are on payroll, money you pay yourself has to go through your payroll and is subject to all payroll taxes. Minnesota child care providers were able to apply for these grants as part of their January 2022 Child Care Stabilization Base Grant application. This income will not be the same as your food expenses. 4 0 obj %PDF-1.7 If so, how do I do this? For all of the above answers that were No, you can still pay yourself and then use the money for these purposes. oRT@ 66V'aNAS\u8g<05!rzf7M- (bw1RK51 wOffHg]tJ}%NaiIrIV.y3*2w@LIGFIm(IsMv 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: May I decrease wages for employees during the grant period? It wont matter if he doesnt sign it. Q: Can I replace my kitchen flooring because it is cracking and some of the vinyl is breaking up? No other family income will be affected, meaning you wont pay higher taxes on any non-grant income. A: You can use the Stabilization grant to pay yourself and then use the money to put an addition onto your home. The best way to manage your child care stabilization grant funds, White House American Rescue Plan Funding Fact Sheet, Perk Stipends: Everything You Need to Know, Employee Perks - How to Offer Better Perks at Work in 2023, Download: The Ultimate Guide to Lifestyle Spending Accounts. Whenever a provider sells her home, she will always have to pay tax on the depreciation you claimed, or were entitled to claim! Q: Can I call my employee back after receiving the grant, even if I only have two children in care? If you received any other phase of the Idaho Child Care Grant, you may still be eligible for this fourth grant. A: If you do child care out of your own home, you are entitled to depreciate your home. endobj I feel like its just more income I have to claim and pay taxes on. Q: Can I use the Stabilization grant for: Pay my employees life insurance premiums? A: No! Q: Are the Stabilization grants available in Canada? Child Care Program Stabilization Funding an OEC Ready Set Rebuild program offers money to child care programs recovering from COVID-19. Q: How do I know how much I can ask for the grant? ); 45 CFR Parts 98 and 99; The American Rescue Plan (ARP) Act of 2021 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. Can I put it on my 2021 tax return? 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. Investing in Iowa's Child Care (IICC) Funding Program Q: If I pay myself the entire amount of the grant money, will I need to explain why? Q: Can I use the Stabilization grant to purchase a home? A: EIDL is not the Stabilization grant. You will only save a small amount of money on your taxes when hiring your husband. Eligibility Application Recertification Questionnaire Training Grant Funds 1 0 obj A: No. Will I have to pay taxes on what I am getting reimbursed for? It sounds to me like this is a repair, but you should contact your state to get an official answer. Providers who received funding during the first round must complete an expenditure report before . Can painting the house be deducted as a repair? Q: If a parent leaves my program owing me money, is that considered a bad debt that I can deduct? A: No! Child Care Stabilization Grant Questions and Answers. Program Amount . A: You do not have to explain why you pay yourself and you dont need to show a loss. 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