Q: On my grant report I listed mortgage and utilities as expenses. Child Care Grant: Phase 4. How do I figure the deductions? How does this impact my taxes? 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. Can I put it on my 2021 tax return? This bill, based on President Biden's bold American Rescue Plan, provides $39 billion in desperately needed child care relief funding. Discounts, scholarships and refunds are not tax deductible. 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. Provider As household income is low enough; she may only owe the 15 percent in social security and Medicare expenses and can keep $2,975 for any use. Here are the answers to the many questions raised during the webinar. A: Yes. Congress declared that these programs are not taxable income. Q Im receiving this grant quarterly through April 2023. Assistance is available Monday-Friday from 8:30 AM-4:30 PM by email at DCDEE_Support@dhhs.nc.org or phone (919) 814-6300, Option 2. 1 0 obj The CCSG application is now closed. Q: Can I use this grant to pay myself? Is the grant taxable income? Consult with your accountant for more information. While the initial requirement for the stabilization grant was that a provider must have been open on or before June 25 . Q: My son is a part-time assistance that I dont do payroll taxes for him. I plan to discount the current family tuition evenly. A: No, you can offer as many bonuses as you want. . A: If you are incorporated and are being treated as an employee of your corporation, then the corporation will report the grant as income. 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? A: Installing a new driveway or repairing it would both be considered a repair, not a home improvement. The Child Care Stabilization Grant (CCSG) Program sustains Arizona's child care network by giving a consistent, reliable funding source directly to child care providers to cover increased cost and challenges due to COVID-19 through June 2023. COVID-19 Child Care Stabilization and Recovery Grants. No! Clearly a couch meets that definition. The second child care stabilization grant was released on July 5, 2022. %PDF-1.7 If you are considered a hobby, you might not be able to deduct all of your expenses. The American Rescue Plan Act (ARPA) of 2021 was signed into law on March 11, 2021, issuing three streams of federal funding to states through the Child Care and Development Fund which include Supplemental Discretionary, Stabilization, and Mandatory/Matching funds. A: Count the entire room as regularly used as a daycare storage room. With this funding the Illinois Department of Human Services continued the Child Care Restoration Grants (CCRG) and provided 6 rounds of CCRG grant funding from January 2021 - December 2022, providing over $6 million in relief funding to child care programs in Illinois. Q: How do I find out where to apply for this grant? Q: I did not include the grant I got in 2020 on my 2020 tax return. A: Write out a note that says, November 20th, 2021 paid Fred Jones $2,000 in cash to paint my daycare. Try to get him to sign it. r}#llQU]giI@ EvO8hwdm49IOr0&5C{A+C uL0PL CivWqU,E,cunk~q.c8XJ89pXS}slO++1*wZQI Child Care Stabilization Grants Help Desk Support: 1-833-600-2074 eecgrantsupport@mtxb2b.com User Guide - Grant Survey Frequently Asked Questions Grant Requirement Supports: Family Child Care - Training for C3 Operational Grant requirements - YouTube Center-Based - Training for C3 Operational Grant requirements - YouTube chloe johnson peter buck wedding; le mal en elle fin du film The two-year grant period is scheduled to end in September 2023, meaning eligible employees may receive . Q: Do I include the square footage of my garage that is not attached to my home as part of the total square feet of my home? +|>Pv o+$^1-{z(*EW~l3Md Y{'m"7E:OeegN$d8=Jby&afJISI. Q: Can I use the grant to landscape my backyard to build a play set for the daycare? A: No! A: You cannot use the Stabilization grant to pay off a previous loan. In this case, she can deduct the business portion of these expenses by estimating the percent of time they will be used for business versus personal purposes (usually her time-space percentage). 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. What does that do to my time-space%? We are sharing the resources below which are designed to support home-based child care providers as they prepare their taxes, including guidance for handling relief funding, including the PPP. 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. oRT@ 66V'aNAS\u8g<05!rzf7M- (bw1RK51 wOffHg]tJ}%NaiIrIV.y3*2w@LIGFIm(IsMv Programs that are awarded a grant will receive an IRS Tax Form 1099-NEC. Get more information about KidKare. A: The PPP and EIDL programs are administered through the Small Business Administration. A: I dont know. A conservative estimate would be to assume 15 percent for social security/Medicare plus 15 percent federal income tax and about 10 percent for state and local income tax, for a total of 40 percent or $1,400. A: No. Please call us at (315) 446-1220. A: Yes. Like if something happens and you have close or choose to close. Please consult your tax professional, if you have an income tax questions or concerns. Distribution date Deadline; Cohort 1: (Center (100+) October 5, 2021 : October 18, 2021 at 11:59 p.m. CT: Cohort 2: Center (76-100) . Q: Can I pay myself in one lump sum or do I have to pay myself weekly or biweekly? But, they will reduce your federal and state taxable income. It wont matter if he doesnt sign it. Programs that are awarded a grant will receive an IRS Tax Form 1099-NEC. Q: Can I claim Social Security on my ex-husband? Q: Does the federal guidance for this grant require providers to gift any of it to parents? A: If you do so it wont impact your 2020 taxes. Grant funds are not a loan that need to be paid back. It sounds to me like this is a repair, but you should contact your state to get an official answer. 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. A: You must report Food Program reimbursements as taxable income. 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. 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. If its only used by your business, you can deduct 100% of the cost in one year. The American Rescue Plan Act (ARPA) Child Care Stabilization Grant, which some call the daycare grant, is a federal financial assistance program recently launched by the Office of Child Care to provide $24 billion of economic relief to child care programs impacted by the COVID-19 pandemic across the country. Q: Is a new roof a major or minor repair? Q: Where does the grant go on Schedule C? Q: In my state the grant money can be used to reimburse expenses back to February 2020. Q: You said I could offer employees a one-time bonus. A: No, because paying yourself does not create a deduction. Operational Grant Formula Updated. How to Use Child Care Stabilization Grant Funding to Support Your Home-Based Setting. What if I am on payroll with my staff? Q: Do I claim the same time-space% I used last year? 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. 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? Child Care Stabilization Grant Questions and Answers. Can I still deduct them as expenses? 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. This change will be effective through September 30, 2023. Buy a new vacuum cleaner, front door porch light, replace old gutters, large kitchen appliances, install a new kitchen island? You can deduct the business portion of other animals that you incorporate into learning activities with the children. No. 32% of employers have seen some of their employees leave the workforce due to the effects of COVID-19. Can I reallocate some of this money so I dont have to pay income taxes? Q: I moved my child care business out of my home into a separate building. A: If you are self employed, look to see if you file IRS Form 1040SE. Q: I understand I cant lower my employees wages, but what if the employee wants to work fewer hours? Each state, territory, and tribe may further clarify eligibility requirements, but the federal eligibility parameters indicate that licensed, registered, and legally license-exempt center-based and home-based child care providers are eligible. State tax rules apply. 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. Q: Can I use the Stabilization grant to purchase a home? You cant count repairs if you use the standard mileage method, but you can count repairs if you use the actual expenses method. Does that mean I cannot offer a monthly or quarterly bonus? In other words, lets say you paid yourself $5,000 and used $2,000 for items used 100% for your business. Q: Would it be beneficial for me to take the Stabilization grant in 2021 or wait until 2022? In general, every licensed or regulated provider is eligible. You can pay yourself with the EIDL loan. You will report less income in this situation, but you cant deduct anything that a parent owes you. 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: Yes, deduct your time-space% of the cost in one year. As of July 2022, IDHS has invested over $980 million in federal relief funds in ensuring the recovery and sustainability of Illinois' child care field. But, you can pay yourself first and then use the money for these items. Q: Is money I received from the Stabilization grant taxable income? Wuo|E&\ttPVcZ27-d#XH%{a_mTfP %bkTnwuB_k()JZ p)Qk)LWIH67aJ9>jZ4V#^VQn'*T20Y';X+7sAOQ`+ZZ4&+!` Z+Z C2]/cLWIw<4mH:C7CQ9\x&KFX!8\Q4(mYO{N+CSLrcj'$"^)XG.aVa0WLT)&'q=y@xkJvh^A7T1Z *l.dyY 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. / Blog / General / child care stabilization grant taxable. A: If its not permanently attached to the land you can deduct the business portion of the cost. Can I use the grant money for this or would have to pay myself first? If you received any other phase of the Idaho Child Care Grant, you may still be eligible for this fourth grant. Registered family child care providers are eligible for $4,000 in grants. 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