Why are the first two programs not taxable income? Access to safe and reliable child care is the backbone of our economy and essential for employees to get back to work. 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. What is the New Child Care Stabilization Grant? A: An employee can work fewer hours and that wont impact the grant. Q: I moved my child care business out of my home into a separate building. Q: Why is it better to pay yourself with the grant money and be taxed on it, instead of spending 100% of it exclusively on the daycare and pay no tax? You do not have to pay back the Stabilization grant. How does this impact my taxes? A: Yes! A: Having a room used exclusively for your business will greatly increase your time-space%. If they say you cant use it for this purpose, you can pay yourself and then use the money to rewire. Is this grant counted as income? Q: If I pay myself, how much will I owe in taxes? Q: Can I use the grant money to fully remodel my kitchen, put up new house siding, metal roof, new back deck? In other words, lets say you paid yourself $5,000 and used $2,000 for items used 100% for your business. (wUu4JIvAcA:.*S5kL%4HSx gx(#-ZN(?o]Zmp onB={ 0,1 IU]MCU Q: Can I use the Stabilization grant to purchase a home? 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 . 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). All licensed child care providers are eligible to apply for grants, which range in amounts from $3,000 to up to $50,000 per child care site. KidKare is a comprehensive record keeping program that includes an accounting section that allows you to keep track of all your income and expenses. Are you saying this is not deductible? All organizations receiving funding must report this as income to your program. If youre a daycare or childcare provider, read on to find all of the important program details. A: If your state audits how you spent the grant, it is not likely they will audit the rest of your business. 1099, W-2? The plan includes $24 billion in child care stabilization grant funding for states, territories, and tribes to distribute within their state using the Child Care and Development Grant (CCDBG) formula. Q: Can I claim Social Security on my ex-husband? Q: Can I use the Stabilization grant for: Pay my employees life insurance premiums? Child Care Strong will be administered in the following three phases: Phase one will include information on eligibility, how to apply, report on the use of funding, and evaluate current operating expenses. . Ask your tax preparer to advise you. If you receive these funds, you will be mailed a 1099 form. How am I doing that? A: Each state has its own rules about this. Wuo|E&\ttPVcZ27-d#XH%{a_mTfP %bkTnwuB_k()JZ p)Qk)LWIH67aJ9>jZ4V#^VQn'*T20Y';X+7sAOQ`+ZZ4&+!` Z+Z C2]/cLWIw<4mH:C7CQ9\x&KFX!8\Q4(mYO{N+CSLrcj'$"^)XG.aVa0WLT)&'q=y@xkJvh^A7T1Z But, you can pay yourself first and then use the money for these items. A: If you pay your husband you must treat him as an employee and file the W-2, not a 1099. The purpose of the guidance is to help states quickly distribute the stabilizations funds to protect and support the existing child . It had to be decontaminated and repaired. endobj 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. *A f$IU*HT7aAA WR S@(>v6Cv MM&@REumMT O&8 l)mxEBS~1"mk *7k=zbe=eV=YH !8~XRGTTU`=2_2m\mj4GG] G Q: If I have parents are paying me, can I still pay myself and just make more money those months I pay myself? There is not law that requires you to stay in business. It is also important for providers to know that not all business expenses are fully tax deductible. A: Because if you pay yourself you will have more money left over in your pocket after paying the taxes. Stipulations for what the funds can be spent on and how to properly report them. Q: Can I get the grant even if I dont have any helpers? endobj State of Hawaii Child Care Stabilization Grant Program The State of Hawaii Department of Human Services has received funds through the American Rescue Plan Act (ARPA) of 2021 to provide assistance to licensed child care providers experiencing financial hardship and child care market instability due to COVID-19. A: Installing a new driveway or repairing it would both be considered a repair, not a home improvement. Q: Would you need a separate account to pay yourself? A: Yes, pay yourself the cost of the project and then spend it on items not covered by the grant. Are these expenses 100% business or time-space% deduction? This webinar for training and technical assistance providers was presented on June 24, 2021. C w5EgRQXM?O ?SUuoFt+$RAd})YT; u?P?Nrl8%Nq Help is on the way! The February 10th webinar was sponsored by KidKare. . 4 0 obj Q: Can I call my employee back after receiving the grant, even if I only have two children in care? I thought it was seven years. Q: If I start claiming Social Security before my full retirement age, does Social Security look at my gross income or net income to determine if my benefit will be reduced? All Rights Reserved. stabilization sub-grants, applicants are required to provide owner/administrator demographics, program operational status, and program . Q: We are a non-profit preschool facility in our church. Is there a limit to the number of programs that will be funded? You need to contact your state agency to get an answer. Consult with your accountant for more information. A: You can deduct your Time-Space% of your utilities. You will probably owe no more than 40% of the grant in taxes. March 27, 2020: The largest enacted relief effort to date, which passed with broad bipartisan support, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, was signed into law.The CARES Act provided the Child Care and Development Block Grant (CCDBG) with $3.5 billion and Head Start programs with $750 million. Q: Can I use the Stabilization grant to replace my old central air condition unit? Did this change? A: I dont know. A: No. Original URL . Consult your state for the answer. A: If you dont spend all of the grant money on items used 100% for your business, it will increase your business profit. The purpose of STABLE is to respond to the urgent need to stabilize the child care sector in Georgia. x][s8~OUNIS6MxJyzdS3 KY)13ed b6|0-Fiqaps7+y1;? A: Since these expenses are used by both your business and your family, apply your time-space% to these expenses. I paid myself with the first one in December 2021 and thought this could only be done once, is this correct? Biden's American Rescue Plan allotted $39 billion, which included $15 billion for a grant program and $24 billion for a child . This is unsustainable for many reasons. How do I figure the deductions? Program Amount ?y-|G1H3/_|/I'>_|!P,0ZE2:PTon_h The application process and distribution structure varies from state to state, so check your local government website to confirm application deadlines and important dates. If the item is used for business and personal purposes, use your time-space% to determine the amount of the deduction. Q: Can I pay myself in a lump sum or spread it out weekly or monthly? 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? Rates are reflective of the different costs associated with each program size. Keep in mind that all of these funds are taxable, so maintain records of how you . In almost every situation, a provider will benefit financially from these grants even after taxes. Our goal is to help your program become financially secure. Child Care and Development Fund (CCDF) Home Visiting; . Even if I didnt get Form 1099? Please call us at (315) 446-1220. Q: Are the Stabilization grants available in Canada? Such a record could say, February 23, 2022 - $4,000 pay myself with the Stabilization grant.. Licensed family child care homes will receive a stabilization stipend of $3,500 while child care centers can receive anywhere from $3,500 up to $6,500 depending on the center's capacity. Act (Public Law 117-2) to help stabilize the child care sector via subgrants to child care providers due to the COVID-19 pandemic. A: You should absolutely take it. What dates matter for the child care stabilization grant? How do I get the childcare stabilization grant? Q: I did not include the grant I got in 2020 on my 2020 tax return. 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. You will only save a small amount of money on your taxes when hiring your husband. But you can pay yourself and then use that money to fund your IRA. 9857 et seq. ! 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! Providers who received an initial disbursement will receive email notifications via NJCCIS when they are eligible to recertify, this process will begin in December 2022. Take a before and after picture of the area he painted. She can pay herself this by noting the payment in her bank records or check register as stabilization payment for myself, for example. 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. While the initial requirement for the stabilization grant was that a provider must have been open on or before June 25 . Does that mean I cannot offer a monthly or quarterly bonus? All $20 million of the One-Time Supplemental Stabilization Grant funds was awarded in January 2022. Grant funding amounts and distribution schedule. Q: I have remodeled my kitchen and bathrooms. / Blog / General / child care stabilization grant taxable. Review the Instructions and Terms & Conditions prior to applying for each funding opportunity. 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. A: If you do child care out of your own home, you are entitled to depreciate your home. You dont have to if you dont want to. Q: How do I find out where to apply for this grant? She may keep the funds in the bank account as an emergency fund for later use or she can spend it as she wishes. Can I still receive the Stabilization grant? 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. Operational Grant Formula Updated. 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. 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. 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. Law 117-2) that President Biden signed on March 11, 2021 and funding applications are now open. . Communi cat i on wi l l Can I reallocate some of this money so I dont have to pay income taxes? 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. Webinar for training and technical assistance providers was presented on June 24 2021... 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