Top of the Document . A: Depends on what your state says. The amount your reduced tuition would have no impact on your taxes. I feel like its just more income I have to claim and pay taxes on. chloe johnson peter buck wedding; le mal en elle fin du film While the initial requirement for the stabilization grant was that a provider must have been open on or before June 25 . Building Equitable Early Childhood Systems, Early Care & Education Quality Initiatives, Harnessing Opportunities for Positive Early Childhood (HOPE), The True Cost of Providing Safe Child Care During the Coronavirus Pandemic, Help is on the way! When will I be notified of the new monthly grant amount that is effective October 1, 2023? A: It will depend on your personal finances. Child Care Relief Funds The following applications are available to eligible child care providers to apply for relief 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. You can choose which method to use each year. A: The EIDL loan is not forgivable, you must pay it back over 30 years. Check with your state agency about this grant question. In response to the COVID-19 public health emergency and its impact on the child care industry, President Biden signed the American Rescue Plan Act of 2021 (ARP Act). Rates are reflective of the different costs associated with each program size. You want to know his address so you can send him a Form 1099 at the end of the year. If it is permanently attached to the land, you must depreciate the business portion of the cost over 39 years. child care, child and adult protective services, adoption, and child support services. You must recalculate your time-space% each year. Example 2: Provider uses full amount for business expenses Q: You said I could offer employees a one-time bonus. Q: If I use the actual expenses method to claim food expenses in one year, can I switch to using the standard meal allowance method in another year? If you do, the amount that you lower your tuition is not tax deductible. A: You can deduct your Time-Space% of your utilities. 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. Q: We store a lot of our dcor and child care stuff in our attic. Contributions to an IRA will not reduce your Social Security/Medicare taxes. Yes. A: You wont have to ask. You can use it for free during a 30 day trial period. Therefore, its not a good idea to pay your husband. Q: Is it better to pay myself with this grant or spend it on items for my business? These grants are in addition to other pandemic-related relief funds (e.g., CARES grants, Paycheck Protection Program loans, EIDL loans). See the video here: [video width="1390" height="1000" mp4="http://tomcopelandblog.com/wp-content/uploads/2022/02/Questions-and-Answers-about-Stabilization-Grants.mp4"][/video]. Eligibility Application Recertification Questionnaire Training Grant Funds A: Yes, you can pay yourself any amount. Contact your state for the answer. It had to be decontaminated and repaired. Help is on the way! Q: I refunded two weeks of care for a family that had to quarantine. [1]This amount will depend on the state in which the provider lives. June 02, 2021. A: I assume you are on payroll because you are being treated as employee of a corporation. Yes. Q: If I use the grant money to pay myself and then use the money to repair my home or fix my basement, can I deduct this as a business expense? Report as income, the amount you received from parents. A: I dont know. 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 should absolutely take it. The grants cannot be used for new construction or major renovations. A: Count the entire room as regularly used as a daycare storage room. Can we use the Stabilization grant to repair or replace these items? And while many childcare providers have opened back up, its been anything but easy. But you can pay yourself and then use that money to fund your IRA. <>/Metadata 2634 0 R/ViewerPreferences 2635 0 R>> Q: Where does the grant go on Schedule C? It may be the same or may not. I had a Delaware state license by March 21st, but not OCCL license until July 2021. The second child care stabilization grant was released on July 5, 2022. Can I use the grant to hire a clean-up crew? Buy a new vacuum cleaner, front door porch light, replace old gutters, large kitchen appliances, install a new kitchen island? Family child care providers must report any portion of the stabilization grant that they use to pay themselves as taxable income on their federal and state income tax return (unless their state chooses to make the grant not taxable). Q: Are the Stabilization grants available in Canada? Is replacing this considered a repair or home improvement? YGF:JKSj"tZO+rR&e ]ii D I WHAT: The department's Early Childhood Division is using funding streams to support the health and sustainability of North Dakota's child care sector. 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? You will have to withhold and pay payroll taxes on these amounts. Where to find more information 24 February 2023 . Q: I need a new washer, dryer and water heater. 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 It is also important for providers to know that not all business expenses are fully tax deductible. +|>Pv o+$^1-{z(*EW~l3Md Y{'m"7E:OeegN$d8=Jby&afJISI. But, you can pay yourself first and then use the money for these items. 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: Yes, pay yourself the cost of the project and then spend it on items not covered by the grant. What does that do to my time-space%? Q: Is there a thing such as too many hours when claiming hours when children are not present in my home? Find Stabilization Grant Applications for your State or Territory. Consult your state for the answer. A: Yes. Adhering to your states unique spending and reporting requirements for funds that are part of the grant through the Office of Child Care. On another slide it says that state grants are taxable income. You will then report your wages as income. Q: On my grant report I listed mortgage and utilities as expenses. A: You cannot deduct any costs associated with a dog or cat. Q: Is the Paycheck Protection Program (PPP) taxable income? . endobj If so, how do I do this? Q: Does the federal guidance for this grant require providers to gift any of it to parents? This webinar for training and technical assistance providers was presented on June 24, 2021. 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. Afterwards it costs $99.00 a year. You will probably owe no more than 40% of the grant in taxes. A: I dont know the answer for your particular state, sorry. Before the pandemic, there were approximately 675,000 childcare providers around the country, mostly small businesses, who were already operating on thin margins. 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. Q: If I give my staff a bonus am I doing it through payroll? But, they will reduce your federal and state taxable income. Child Care Grant: Phase 4. This is clearly the case if you were receiving the lower Tier II reimbursement rate before July. Q: Can I pay myself in a lump sum or spread it out weekly or monthly? You can deduct all of the reimbursed meals and snacks as well as un-reimbursed meals and snacks. Youll have to contact the state agency that administers this grant. 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. Regarding federal tax rules, please contact your tax preparer or the Internal Revenue Service for guidance. And while many childcare providers have opened back up, its been anything but easy. Stabilization Grants 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. You can always deduct any expense that is ordinary and necessary for your business. Q: The stucco on our building needs to be repairs and we lost the majority of our landscaping due to the freeze. Q: Can I use this grant to pay myself? Q: Is the Economic Injury Disaster Loan (EIDL) a Stabilization grant or is this a loan that must be repaid? Q: My son is a part-time assistance that I dont do payroll taxes for him. Q: We are a non-profit preschool facility in our church. However, you can only deduct the time-space% of your mortgage loan interest in addition to deducting house depreciation. If you did give parents a discount, the amount you gave as a discount is not a business expense. 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. 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. See this from the AARP website. Here are the answers to the many questions raised during the webinar. 1099, W-2? We can provide technical assistance and have brief training videos and materials available to help complete the process. 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