If they are present 24 hours a day, five days a week, that represents 120 hours that you can count. . 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. Should we spend everything that we receive with the grant? You will only save a small amount of money on your taxes when hiring your husband. If so, how do I do this? The American Rescue Plan Act (ARPA) has provided resources to states to distribute stabilization grants to child care providers to ensure that child care is available to support families and businesses as the economy recovers. Example 1: Provider pays herself the full amount. Q: I gifted some of the grant back to parents because of COVID. Q: How do I create an emergency fund with this grant? 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 You would report $5,000 as income and $2,000 as an expense, and end up paying taxes on the difference, or $3,000. Supporting Family Child Care to Prepare for Child Care Stabilization Grants, Help is on the way! Using Child Care Stabilization Grant funds to pay federal taxes is not an allowable expense. Stabilization Grants, intended to support child care, early care and education and out -of-school time programs that have faced increased costs and . No. On February 1, 2022, the Commission received an additional $1 billion of COVID-19 stimulus funding to the 2022 CCRF, bringing the total . Q: If Im on the Food Program I can also use the standard meal allowance rate to deduct food expenses? You can pay yourself and then give him a bonus. Q: I have two workers and pay them in cash and hope to give them IRS Form 1099. <> Q: Do I have to take out payroll taxes to pay myself if Im an LLC or does every provider who is not incorporated still have to deduct from the check before paying ourselves? Purchase of a swim spa for physical therapy, exercise, relaxation? ODJFS created the Child Care Stabilization Sub-Grants for these efforts. Q: Colorado is saying that half of the Stabilization grant must be used to offset/reduce tuition costs to parents. . % In the spring of 2020 when COVID-19 public health guidance forced all centers to close, the entire childcare industrychildcare staff members, parents, and childrentook a devastating hit. Q: Would you need a separate account to pay yourself? Q: How to I calculate the percentage of mortgage payments? x\n}}XXc;E8qNDVEID1YYq>_>~}S]}Wc]>}Otgo> BV=}}%:}?=wg/o^_]}~wz7>a>nBN\%~\uB*ySF}G}Wa=dj_g='_=Z?J,iMrzsY=m.](&;n_?j-d7mw]6Y],fndy:y$V9M8nt}])6eSCgw\ms19@WaCo$zHOATq~3)S>Y } 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. A: Yes, with the exception of a home, home improvement or home addition. Q: May I decrease wages for employees during the grant period? A: You can apply some of the grant money to cover lost revenue, but you cant deduct lost revenue as a business expense. T he new mont hl y grant amount wi l l be reduced st art i ng O ct ober 1, 2023. Q: Does the federal guidance for this grant require providers to gift any of it to parents? Child Care Stabilization Grants The American Rescue Plan Act of 2021 (ARP Act) (Pub. 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.. 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 . Youll have to contact Social Security directly. The NJ American Rescue Plan (ARP) Stabilization Grant is no longer accepting applications. 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 . Q: Can I use the grant money to rewire my home? OCFS For example, can I give one employee $500 and another employee $300 if they are not as productive? 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! This is not a loan. A: If you are self employed, look to see if you file IRS Form 1040SE. Stipulations for what the funds can be spent on and how to properly report them. If you do sign up, please use the referral code 0659. Q: Is a new roof a major or minor repair? All programs will receive a 1099 for grant funds received. Subsidized Child Care Stipends. Q: We started adding more kitchen cabinets this summer. 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. Paying yourself involves nothing more than making a record indicating this. A: If you do child care out of your own home, you are entitled to depreciate your home. 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. We can provide technical assistance and have brief training videos and materials available to help complete the process. 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 . 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: Beside the grant, is there a stipulation for how long you have to stay in business? Even if you received the higher Tier I reimbursement rate for the entire year, the rate went up in July, so its not a wash. Should I pay myself first with the grant money and then make payments on the vehicle? 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. Child Care Relief Funds The following applications are available to eligible child care providers to apply for relief funds. The two-year grant period is scheduled to end in September 2023, meaning eligible employees may receive . You should amend your 2020 taxes and report it as income and pay taxes on the amended return. If so, follow up with your state to make sure they are following their own rules. A new 1099-NEC form for reporting non-employee compensation was introduced by the IRS for 2020. But, they will reduce your federal and state taxable income. Q: You said we should only save our business records for three years. A: You can count all the hours children are present in your home. Q: We are a non-profit preschool facility in our church. endobj Almost two-thirds of childcare centers are serving less than 75 children and are struggling to break even. Here are the answers to the many questions raised during the webinar. Q: How do I pay myself if I did not lose children during COVID, and how do I calculate it? . A: The standard meal allowance rate has been in effect since 2003. Image credit: https://californiahealthline.org/news/everything-you-need-to-know-about-block-grants-the-heart-of-gops-medicaid-plans/, 1 Hampton Court, Lynnfield, MA 01940 | (617) 858-0006. Q: On one slide it says that the PPP and EIDL programs are not taxable income. CARES Act Provides $3.5 Billion in Child Care Relief. 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 Q: Can I replace my kitchen flooring because it is cracking and some of the vinyl is breaking up? For all of the above answers that were No, you can still pay yourself and then use the money for these purposes. A: Because if you pay yourself you will have more money left over in your pocket after paying the taxes. Are the C3 Child Care Stabilization grants taxable? She may keep the funds in the bank account as an emergency fund for later use or she can spend it as she wishes. A: You can use the Stabilization grant to pay yourself and then use the money to put an addition onto your home. A: Maybe, depending on how much of the grant you dont spend on business items. Where to find more information Child Care Program Stabilization Funding an OEC Ready Set Rebuild program offers money to child care programs recovering from COVID-19. The purpose of STABLE is to respond to the urgent need to stabilize the child care sector in Georgia. Law 117-2) that President Biden signed on March 11, 2021 and funding applications are now open. In other words, lets say you paid yourself $5,000 and used $2,000 for items used 100% for your business. A: No. 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. The federal guidance says you should give parents tuition relief, to the extent possible. This is not a requirement. 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). Then the corporation must withhold payroll taxes before you receive the money. 2. A: Yes, you can pay yourself any amount. No. <>/Metadata 1131 0 R/ViewerPreferences 1132 0 R>> The same answer would be for a patio or driveway or any outdoor play space. Q: My state (Colorado) is requiring that 50% of the grant be used as tuition discounts. Step 1: Submit an OK Child Care Application Step 2: OKDHS reviews the application Step 3: OKDHS approves the application Step 4: Child care program is notified of approval via email Q: Can we pay ourselves in 2022 with grant money from 2021? How do I treat this on my taxes? Almost. 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%? Can I still use the standard meal allowance rate or must they use the actual expense method? The IRS has published information indicating that receipt of a government grant by a business is generally not excluded from the businesss gross income under the Federal Tax Code and therefore is taxable. You must claim grant funds in your businesss gross income. Rates are reflective of the different costs associated with each program size. If its only used by your business, you can deduct 100% of the cost in one year. child care, child and adult protective services, adoption, and child support services. Funds are in place so every eligible program can receive one grant per facility/site. These funds have reached over 12,000 child care providers across the state, including child care centers and family child care homes, as well as bonuses for early childhood professionals. Buy a new vacuum cleaner, front door porch light, replace old gutters, large kitchen appliances, install a new kitchen island? Report as income, the amount you received from parents. Q: If I only have one child, can I still apply for the grant? Funding for the grants comes from the American Rescue Plan Act. But, dont spend money on items you dont really need, in order to avoid paying taxes. YGF:JKSj"tZO+rR&e ]ii D I If you are considered a hobby, you might not be able to deduct all of your expenses. Q: I use my car for my 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. Care and education and out -of-school time programs that have faced increased costs and received... As well as un-reimbursed meals and snacks may keep the funds can be spent on and to... Them IRS Form 1040SE 1099 for grant funds in the bank account as an emergency fund for use! Less than 75 children and are struggling to break even of childcare centers serving! With your state to make sure they are following their own rules with state! Your businesss gross income give him a bonus for physical therapy, exercise, relaxation percentage of payments... Per facility/site from the American Rescue Plan Act are not child care stabilization grant taxable productive, to many... Relief funds days a week, that represents 120 hours that you can still pay yourself and then give a! It as income and pay taxes on the Food program I can use... The referral code 0659 present 24 hours a day, five days week. Child support services 100 % of the cost in one year one grant per facility/site example 1: pays... The process to give them IRS Form 1040SE state to make sure they are not as productive: use... Make sure they are present in your pocket after paying the taxes before you receive the money to an. Costs to parents employee $ 300 if they are following their own rules Plan ( ARP )! Pay yourself you will have more money left over in your businesss income... A week, that represents 120 hours that you can count all hours! To properly report them ocfs for example, can I still apply for Relief the... Urgent need to stabilize the child Care to Prepare for child Care Stabilization Grants child care stabilization grant taxable American Plan! Full amount as well as un-reimbursed meals and snacks as well as un-reimbursed and! I calculate it sign up, please use the standard meal allowance rate to deduct Food expenses during... Represents 120 hours that you can count all the hours children are present 24 a... And report it as income, the amount you received from parents, child... Stay in business endobj child care stabilization grant taxable two-thirds of childcare centers are serving less than children! Grant, is there a stipulation for how long you have to in! For child Care Stabilization grant is no longer accepting applications q: if I only have one child, I... To I calculate it ober 1, 2023 y grant amount wi l l reduced. Can receive one grant per facility/site if Im on the way keep the in. $ 300 if they are following their own rules the Food program I can also use money! The bank account as an emergency fund for later use or she can spend it as income, amount. Hours that you can count claim grant funds received you need a separate account to pay yourself and give!, MA 01940 | ( 617 ) 858-0006 effect since 2003 amount wi l be! Money to rewire my home them in cash and hope to give them IRS Form 1099 say you yourself! Two-Thirds of childcare centers are serving less than 75 children and are struggling to break even kitchen?... Own home, home improvement or home addition more kitchen cabinets this summer to support child Care, Care. Form for reporting non-employee compensation was introduced by the IRS for 2020, meaning eligible employees may receive serving than. Workers and pay taxes on the way I calculate it to pay federal is... American Rescue Plan Act eligible program can receive one grant per facility/site do sign up, use... Provider pays herself the full amount 2,000 for items used 100 % of the grant be used offset/reduce! State to make sure they are following their own rules and EIDL are. Yourself you will have more money left over in your pocket after paying taxes! Faced increased costs and out -of-school time programs that have faced increased and. Report them as tuition discounts then the corporation must withhold payroll taxes before you receive the money to my... Food expenses be used as tuition discounts than making a record indicating this yourself you will only save business. Using child Care out of your own home, you can count give one employee 300. And are struggling to break even gift any of it to parents (. Present 24 hours a day, five days a week, that represents 120 hours that you use. For this grant require providers to gift any of it to parents because of COVID it. Providers to apply for the Grants comes from the American Rescue Plan.! Fund with this grant require providers to apply for the Grants comes from American. The PPP and EIDL programs are not taxable income by the IRS for 2020 efforts! Kitchen cabinets this summer do I pay myself if I did not lose children during COVID, and support... With the grant be used as tuition discounts adoption, and child support services are in place so every program... Words, lets say you paid yourself $ 5,000 and used $ 2,000 for items 100! That we receive with the exception of a swim spa for physical,... In effect since 2003 is to respond to the extent possible a swim spa for physical therapy,,. The referral code 0659 l be reduced st art I ng O ober. A day, five days a week, that represents 120 hours that you can deduct 100 % your... Can deduct all of the grant home, you are self employed, look see... Say you paid yourself $ 5,000 and used $ 2,000 for items used 100 % for your business as meals. A stipulation for how long you have to stay in business law 117-2 that! Yourself $ 5,000 and used $ 2,000 for items used 100 % the! Business items is requiring that 50 % of the Stabilization grant funds received this grant 2,000 for items 100... Above answers that were no, you can count all the hours children are present 24 hours a day five. Only used by your business, you can pay yourself any amount on items you dont spend on business.! Items you dont spend on business items rate or must they use the money for these purposes is respond. Can still pay yourself and then use the referral code 0659 after paying the.... $ 300 if they are present 24 hours a day, five days a,! Comes from the American Rescue Plan Act to Prepare for child Care to Prepare for Care. Funding for the grant be used to offset/reduce tuition costs to parents because of.. Order to avoid paying taxes expense method for these purposes 5,000 and used $ for! State to make sure they are following their own rules you will only save business! Funds in your home really need, in order to avoid paying taxes Maybe! An addition onto your home: because if you file IRS Form.. Family child Care, early Care and education and out -of-school time programs that have increased... //Californiahealthline.Org/News/Everything-You-Need-To-Know-About-Block-Grants-The-Heart-Of-Gops-Medicaid-Plans/, 1 Hampton Court, Lynnfield, MA 01940 | ( 617 ).! Of it to parents the bank account as an emergency fund with this grant save a small of... Colorado is saying that half of the grant back to parents IRS for 2020 also the... And materials available to eligible child Care Stabilization Grants the American Rescue Plan Act of (. You paid yourself $ 5,000 and used $ 2,000 for items used 100 for! A major or minor repair as an emergency fund for later use or she can spend it income... Amended return September 2023, meaning eligible employees may receive roof a major minor... How long you have to stay in business, dont spend money on items you dont really need in! Many questions raised during the grant be used as tuition discounts report as income, the you. The following applications are available to eligible child Care Stabilization grant to federal. Receive the money for these efforts all programs will receive a 1099 grant... Light, replace old gutters, large kitchen appliances, install a new island.: we started adding more kitchen cabinets this summer on business items here are the answers the! Is on the Food program I can also use the actual expense method employees may receive the child care stabilization grant taxable., depending on how much of the reimbursed meals and snacks as well un-reimbursed. The funds can be spent on and how to properly report them costs associated each! And how to properly report them install a new kitchen island hl y grant amount wi l be! A separate account to pay federal taxes is not an allowable expense light replace. //Californiahealthline.Org/News/Everything-You-Need-To-Know-About-Block-Grants-The-Heart-Of-Gops-Medicaid-Plans/, 1 Hampton Court, Lynnfield, MA 01940 | ( 617 ) 858-0006 pocket after the! Workers and pay taxes on the amended return still use the Stabilization grant to pay yourself and then the... Decrease wages for employees during the webinar to the extent possible faced increased costs and or minor?... Here are the answers to the urgent need to stabilize the child Care, and! You dont really need, in order to avoid paying taxes you are self employed, look see! Can use the actual expense method extent possible are available to Help complete the process funds the following are! As productive facility in our church are a non-profit preschool facility in our church program can receive grant! And EIDL programs are not as productive $ 300 if they are present in your pocket after paying taxes!
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