Q: Do we need to enter into KidKare if I am paying myself? In other words, lets say you paid yourself $5,000 and used $2,000 for items used 100% for your business. To receive grant funds, child-care providers must submit an application. These include the Child Care Stabilization Grants, SBA forgivable loans, new child tax credit, what's deductible in the era of COVID, calculating your Time-Space% if you have been closed, and more. Each state will determine how much a provider will receive based on a criteria they have developed. Q: Can I use this grant to pay myself? We can provide technical assistance and have brief training videos and materials available to help complete the process. K.4jq%E$ZT^:D+0mdEdUW#b=C\2CQ&j,AP5JRYMHj*6v)5oI DWH Is this correct? Our goal is to help your program become financially secure. Can I add a roof for shade, electricity, for fans, light and screens against insects. If so, follow up with your state to make sure they are following their own rules. Q: Is the Economic Injury Disaster Loan (EIDL) a Stabilization grant or is this a loan that must be repaid? Under federal guidance, this clearly language clearly applies to a family child care provider, even if she has no employees. She may keep the funds in the bank account as an emergency fund for later use or she can spend it as she wishes. 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. On October 19, 2021, the Texas Workforce Commission (TWC) approved distribution of $2.45 billion American Rescue Plan Act funds for direct relief to child care programs.On February 1, 2022, the Commission dedicated an additional $1 billion of COVID stimulus funding to the 2022 CCRF, bringing the total available funds to $3.45 billion. Child Care Relief Funds The following applications are available to eligible child care providers to apply for relief funds. Ask your tax preparer to advise you. Q: You said we should only save our business records for three years. Q: If I store all my childrens books on shelves in my sons room (he is too old for them), do I count the square footage that the shelves take up, or do I count the entire room in my time-space% calculation? NOTE: Child Care Stabilization Grant payments may be taxable. However, even if it does push you into a higher tax bracket, it only means you will pay more in taxes on the grant amount that is in the higher tax bracket. Q: If I pay myself in order to make some changes that are not covered by the Stabilization grant, should I pay myself for the cost of the project, or is there some type of guidance I should use? You can pay yourself and then give him a bonus. A: Each state has its own rules about this. A: If you are self employed, you are filing IRS Form 1040SE which calculates how much Social Security/Medicare tax you owe. What does that do to my time-space%? Check with your state agency about this grant question. If 30 percent of her home is used for the child care business, then only 30 percent of the grant funds used to pay her mortgage/rent can be deducted. For tax purposes, she should reserve a portion of the grant amount to go toward her taxes. On another slide it says that state grants are taxable income. Please be aware that all funds are taxable and will need to be spent no later than . Q: We store a lot of our dcor and child care stuff in our attic. The two-year grant period is scheduled to end in September 2023, meaning eligible employees may receive . A: IRS rules say that if you show losses three out of five years, there is an increased chance of being audited and the IRS might conclude that you are operating a hobby, not a business. Can painting the house be deducted as a repair? r}#llQU]giI@ EvO8hwdm49IOr0&5C{A+C uL0PL CivWqU,E,cunk~q.c8XJ89pXS}slO++1*wZQI You just pay yourself because you are the owner. A: You arent paying yourself for any particular hours you work. No. Q: How do I find out where to apply for this grant? A: You can count all hours that you work in your home, either caring for children or doing other business activities. A: I dont know. Q: How to I calculate my Time Percent when children are in my care 24 hours a day? 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. Help is on the way! Painting is a repair. Q: Is there a thing such as too many hours when claiming hours when children are not present in my home? QtFA/MdTV'
+` _-gNT_eS?o9u"V)p y[7 A: You can use the grant money directly for these expenses. Mifflintown, PA 17059. For most providers, this would be about 30-40% in taxes. 9EJH-E*!PPRs&-L\1%gh7XXjZ/ How does this impact my taxes? Q: Is this grant available to centers that have grade school children and are licensed by the Department of Education instead of the Department of Human Services? %PDF-1.7
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? 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. A: If you pay your husband you must treat him as an employee and file the W-2, not a 1099. Access to safe and reliable child care is the backbone of our economy and essential for employees to get back to work. 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. p Or call the OCFS Stabilization Help Line: (844) 863-9319. Supporting Family Child Care to Prepare for Child Care Stabilization Grants She can deduct these expenses from the taxes she owes, so she will not owe additional taxes if she receives the grant. 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. A: State applications will often use the word personnel when describing what the grant can be used for. Is this a home improvement or a repair? Top of the Document . Q: Can I use the Stabilization grant for: Pay my employees life insurance premiums? <>/Metadata 2634 0 R/ViewerPreferences 2635 0 R>>
24 February 2023 . ]ATIGJK5NF5 4 R&a&YFhJl M2z[{F6M6 Q: I moved my child care business out of my home into a separate building. Tom Copelands Blog: Taking Care of Business On October 19, 2021, the Texas Workforce Commission ( TWC) approved distribution of $2.45 billion in American Rescue Plan Act funds for direct relief to child care programs. x\n}}XXc;E8qNDVEID1YYq>_>~}S]}Wc]>}Otgo> BV=}}%:}?=wg/o^_]}~wz7>a>nBN\%~\uB*ySF}G}Wa=dj_g='_=Z?J,iMrzsY=m.](&;n_?j-d7mw]6Y],fndy:y$V9M8nt}])6eSCgw\ms19@WaCo$zHOATq~3)S>Y
} 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. Child Care Stabilization Funding DECAL recognizes the critical role that child care plays in supporting children, families, businesses, and the economy as a whole. A: Each state sets its own criteria. A: You cannot deduct any costs associated with a dog or cat. Does that mean I cannot offer a monthly or quarterly bonus? A: The remodeling of a room is considered a home improvement that you must depreciate over 39 years after applying your time-space%. Q: Can I apply for the Stabilization grant if I already received the Paycheck Protection Program loan? How long do I have to stay in business if I receive stabilization grant funding? Q: If I have been in business for 30 years and sell my home ten years after I close my business, do I still need to pay tax on the home depreciation I claimed while in business? If you need to spend the grant money on items for your business, go ahead. Q: If I transferred money to pay myself earlier but sometimes forgot to make a note, can I go back and fix it? 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! I paid myself with the first one in December 2021 and thought this could only be done once, is this correct? You will report less income in this situation, but you cant deduct anything that a parent owes you. Find Stabilization Grant Applications for your State or Territory. If you do sign up, please use the referral code 0659. Can I still deduct them as expenses? You do not have to pay back the Stabilization grant. Paying yourself involves nothing more than making a record indicating this. Q: The stucco on our building needs to be repairs and we lost the majority of our landscaping due to the freeze. Many states are requiring that 20% of the grant be allocated to employees. See the funding breakdown by state, tribe, and territory, and more information about the grant on the. Q: Do I claim the same time-space% I used last year? Q: I have remodeled my kitchen and bathrooms. Minnesota child care providers were able to apply for these grants as part of their January 2022 Child Care Stabilization Base Grant application. If the item is used for business and personal purposes, use your time-space% to determine the amount of the deduction. A: Write out a note that says, November 20th, 2021 paid Fred Jones $2,000 in cash to paint my daycare. Try to get him to sign it. But, you can pay yourself with the grant money and then buy a new air conditioner. How do I get the childcare stabilization grant? Download our ebook to see why employee stipends are the most common new perk for remote & hybrid work. YGF:JKSj"tZO+rR&e ]ii D I 4 0 obj
Q: Can I claim Social Security on my ex-husband? 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. Keep enough records to show that children are present 24 hours. If he did, then you properly paid your Social Security/Medicare taxes. 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. Q: I refunded two weeks of care for a family that had to quarantine. KidKare is a comprehensive record keeping program that includes an accounting section that allows you to keep track of all your income and expenses. Q: My business is an S Corporation. If you did give parents a discount, the amount you gave as a discount is not a business expense. Before the pandemic, there were approximately 675,000 childcare providers around the country, mostly small businesses, who were already operating on thin margins. 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. Please call us at (315) 446-1220. Supporting Family Child Care to Prepare for Child Care Stabilization Grants, Help is on the way! %
Are the One-Time Child Care Stabilization Grant funds taxable? Q: Would you need a separate account to pay yourself? The purpose of the guidance is to help states quickly distribute the stabilizations funds to protect and support the existing child . L*|29j]NG0Sm59!aI6a}4r. 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? We are planning on finishing the kitchen after the first of the year by replacing the old cabinets. 721 Smith Rd. A: You cant use grant money to pay someone who is not treated as your employee. Q: Can I use the grant money to fully remodel my kitchen, put up new house siding, metal roof, new back deck? For all of the above answers that were No, you can still pay yourself and then use the money for these purposes. Q: Is the Stabilization grant taxable income? Can we use the Stabilization grant to repair or replace these items? A: You can use a vehicle for both business and personal purposes. We have received grants from our city and our county. Consult your state for the answer. A: You can claim expenses for your vehicle using either the standard mileage method or the actual expenses method. The corporation can deduct your wages and payroll taxes. Subject: Child Care Stabilization Grants Appropriated in the American Rescue Plan (ARP) Act (Public Law 117-2) signed into law on March 11, 2021. Q: I did not include the grant I got in 2020 on my 2020 tax return. You can deduct the amount you pay your assistant. Investing in Iowa's Child Care (IICC) Funding Program There has never been this amount of federal funding dedicated to childcare providers, which makes this an incredible opportunity. Child care providers that receive a grant have a reporting obligation on Form 1099-G if the amount is above $600. This means you will pay some additional Social Security taxes, but it also means your higher profit will potentially increase your Social Security benefits. The February 10th webinar was sponsored by KidKare. Q: Can I get the grant even if I dont have any helpers? You should amend your 2020 taxes and report it as income and pay taxes on the amended return. Q: My son is a part-time assistance that I dont do payroll taxes for him. 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). If you are a non-profit or not-for-profit organization, this funding is tax exempt. endobj
Once you do that, you can then spend the money on a new roof. The IRS has published information indicating that "receipt of a government grant by a business is generally not excluded from the business's gross income under the Federal Tax Code and therefore is taxable." You can deduct the business portion of other animals that you incorporate into learning activities with the children. Are those grants considered taxable income? A: No! Not all applications are guaranteed to be approved. Did this change? The 2022 tax season is here! If so, the corporation must pay you with the grant money through your normal payroll process which means paying payroll taxes. Q: If I pay myself, how much will I owe in taxes? A: If you are incorporated and are being treated as an employee of your corporation, then the corporation will report the grant as income. RuH )rPG_hDR,\{@f7hfx#noL5'4+Dc"HmZtz)FNF!`\B,edxDk"~K]1XCMGb:BVLMMv/>>`sZ+`\GvLPE7TRi4}3U15rUUjx5;]
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/]fT\PIEUrc! If you cant get a clear answer from your state, you should pay yourself with the grant. Adhering to your states unique spending and reporting requirements for funds that are part of the grant through the Office of Child Care. Q: Because of all my deductions I did not show a profit for three years. Q: I have a separate building for child care on the same property as my home. 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, Child Care Stabilization Grants and New Tax Changes for 2021.. applications for three grant opportunities, totaling $150 million, to help child care programs defray . Tax Implications of the Stabilization Grant for NYS Child Care Providers 1,866 views Sep 28, 2021 16 Dislike Share Save Early Care & Learning Council 103 subscribers Comments are turned. Email Us at: providerhelp@childcaresolutionscny.org. <>/Font<>/Pattern<>/XObject<>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI] >>/Annots[ 48 0 R 49 0 R] /MediaBox[ 0 0 540 720] /Contents 4 0 R/Group<>/Tabs/S/StructParents 0>>
You want to know his address so you can send him a Form 1099 at the end of the year. A: Count the entire room as regularly used as a daycare storage room. Wuo|E&\ttPVcZ27-d#XH%{a_mTfP
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p)Qk)LWIH67aJ9>jZ4V#^VQn'*T20Y';X+7sAOQ`+ZZ4&+!` Z+Z C2]/cLWIw<4mH:C7CQ9\x&KFX!8\Q4(mYO{N+CSLrcj'$"^)XG.aVa0WLT)&'q=y@xkJvh^A7T1Z In that case the church is filing a tax return that includes your preschool. Q: On my grant report I listed mortgage and utilities as expenses. If you just replaced the shingles this would probably be considered a minor repair. 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. The second child care stabilization grant was released on July 5, 2022. Can I use the grant money for this or would have to pay myself first? Therefore, my answers below may not be the same answers your state gives you. This builds on critical down payments on relief . Youll have to contact Social Security directly. 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? x][s8~OUNIS6MxJyzdS3 KY)13ed
b6|0-Fiqaps7+y1;? CHILD CARE STABILIZATION GRANT DATA NCDHHS Division of Child Development and Early Education has created two data dashboards to provide Child Care Stabilization Grants summary data. Childcare isnt just a family issue, its a business issue. Q: How do I create an emergency fund with this grant? The EIDL loan you must pay back. Z~0^ I5%jE6)jh2!Z4Wq3 I had a Delaware state license by March 21st, but not OCCL license until July 2021. You would report $5,000 as income and $2,000 as an expense, and end up paying taxes on the difference, or $3,000. Thats because hell have to report it as income and in some states youll have to purchase workers compensation for him. 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%? 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. 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. You can treat this as a repair and deduct your time-space% of this cost in one year. Q: Colorado is saying that half of the Stabilization grant must be used to offset/reduce tuition costs to parents. Child Care Stabilization Grants Help Desk Support: 1-833-600-2074 eecgrantsupport@mtxb2b.com User Guide - Grant Survey Frequently Asked Questions Grant Requirement Supports: Family Child Care - Training for C3 Operational Grant requirements - YouTube Center-Based - Training for C3 Operational Grant requirements - YouTube Organization, this clearly language clearly applies to a family issue, a. 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