endobj 2 0 obj Is this grant counted as income? <> The same answer would be for a patio or driveway or any outdoor play space. 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? A: Yes, deduct your time-space% of the cost in one year. You will owe 15.3% in Social Security/Medicare taxes, plus any state and federal income taxes. All Rights Reserved. Funds must be used to support the key operating expenses of child care providers to help ensure access to child care for families. There has never been this amount of federal funding dedicated to childcare providers, which makes this an incredible opportunity. 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 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 a neighbor to paint my daycare with cash, how can I record this as an expense? 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? Outdoor space is not considered part of the square footage of your home. support provi ders unt i l June 2024. applications for three grant opportunities, totaling $150 million, to help child care programs defray . If so, the corporation must pay you with the grant money through your normal payroll process which means paying payroll taxes. In almost every situation, a provider will benefit financially from these grants even after taxes. Q: Can I pay myself any amount? 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). Will I have to pay taxes on what I am getting reimbursed for? Ask your tax preparer to advise you. No. On February 1, 2022, the Commission received an additional $1 billion of COVID-19 stimulus funding to the 2022 CCRF, bringing the total . 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. A: RI DHS aims to approve two stipends to all eligible providers, depending upon fund availability. If they say you cant use it for this purpose, you can pay yourself and then use the money to rewire. A: The PPP and EIDL programs are administered through the Small Business Administration. Is this correct? <> How much will my daycare get from the childcare stabilization grant? A: Yes! A: Not directly. Yes. A: I dont know. Q: If I pay myself will I need to give myself a W-2? Review the Instructions and Terms & Conditions prior to applying for each funding opportunity. A: Installing a new driveway or repairing it would both be considered a repair, not a home improvement. Child care has received $54 billion since the start of the pandemic. Please call us at (315) 446-1220. These funds give them a lifeline at the perfect time. If youre a daycare or childcare provider, read on to find all of the important program details. endobj A: No, that would probably be considered a major improvement. You cant count repairs if you use the standard mileage method, but you can count repairs if you use the actual expenses method. A: If you pay yourself with the grant and then buy items used 100% for your business, you wont owe any taxes on the amount you use the grant for this purpose. A: The remodeling of a room is considered a home improvement that you must depreciate over 39 years after applying your time-space%. 24 February 2023 . A: Yes, with the exception of a home, home improvement or home addition. The grants cannot be used for new construction or major renovations. Can I still use the standard meal allowance rate or must they use the actual expense method? The amount your reduced tuition would have no impact on your taxes. Once you do that, you can then spend the money on a new roof. Q: How to I calculate the percentage of mortgage payments? Q: Do we need to enter into KidKare if I am paying myself? But, you can pay yourself with the grant money and then buy a new air conditioner. However, even if it does push you into a higher tax bracket, it only means you will pay more in taxes on the grant amount that is in the higher tax bracket. A: All non-profits should be filing a tax return, unless your preschool is owned by the children. The purpose of the child care stabilization grants is to support child care centers and home-based child care providers to stay open or reopen. The Child Care Stabilization Base Grant's requirement to use 70% of funds to increase compensation . C w5EgRQXM?O ?SUuoFt+$RAd})YT; u?P?Nrl8%Nq Therefore, if you received a $10,000 grant and paid $4,000 in taxes, you would still have $6,000 left over after paying the taxes. This bill, based on President Biden's bold American Rescue Plan, provides $39 billion in desperately needed child care relief funding. Q: My front steps/deck needs to be replaced because of rotted boards. 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 On another slide it says that state grants are taxable income. Q: I have remodeled my kitchen and bathrooms. Q: Can I use the grant to replace my rock driveway with a paved driveway? Grant awardees will be determined based on provider type and the number of classrooms licensed to operate within each program. 9EJH-E*!PPRs&-L\1%gh7XXjZ/ Can I reallocate some of this money so I dont have to pay income taxes? In South Carolina, these stabilizations grants are called "SC Building Blocks". If you are considered a hobby, you might not be able to deduct all of your expenses. A new 1099-NEC form for reporting non-employee compensation was introduced by the IRS for 2020. Q: Would you need a separate account to pay yourself? Q: If I dont use receipts to calculate my food expenses, isnt the calculation a wash? Workforce Innovation Sustain Child Care Subsidy Operations Start-up & Expansion Paycheck Protection Retention of Child Care Staff Q: I have two workers and pay them in cash and hope to give them IRS Form 1099. 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. 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. p Operational Grant Formula Updated. A: Assuming the money you spend on items for your business are used exclusively for your business, the tax consequences are the same as paying yourself. (wUu4JIvAcA:.*S5kL%4HSx gx(#-ZN(?o]Zmp onB={ 0,1 IU]MCU Q: Would it be beneficial for me to take the Stabilization grant in 2021 or wait until 2022? Replace worn out bedroom carpet and hallway with wood floors? 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. Each state will receive anywhere from $39 million to $2.9 billion in funding from the grant to distribute as they see fit to eligible child-care providers. While each state, territory, or tribe can specify the specific uses of grant funds, the funds are intended to support providers general operating expenses, wages and benefits to employees and owners, rent, utilities, cleaning and sanitation supplies and services, and other goods and services needed to maintain or resume operations as well as mental health supports for children, families, and employees. We are sharing the resources below which are designed to support home-based child care providers as they prepare their taxes, including guidance for handling relief funding, including the PPP. Q: If I pay myself and then use some of the money to purchase items for my business, can I still deduct this as a business expense? A: Some states have different rules about this. You will report this as income and pay Social Security/Medicare taxes as well as federal and state income taxes on this income. Keep in mind that all of these funds are taxable, so maintain records of how you . A: Apply your time-space% to the monthly mortgage payment. A: You could try to separate out these costs by comparing the square footage of the separate building with the square footage of your home. Is the grant taxable income? Are these expenses tax deductible? Example 3: Provider uses some of the grant to pay herself and some for business expenses. Even if you received the higher Tier I reimbursement rate for the entire year, the rate went up in July, so its not a wash. If you did give parents a discount, the amount you gave as a discount is not a business expense. Wuo|E&\ttPVcZ27-d#XH%{a_mTfP %bkTnwuB_k()JZ p)Qk)LWIH67aJ9>jZ4V#^VQn'*T20Y';X+7sAOQ`+ZZ4&+!` Z+Z C2]/cLWIw<4mH:C7CQ9\x&KFX!8\Q4(mYO{N+CSLrcj'$"^)XG.aVa0WLT)&'q=y@xkJvh^A7T1Z You should spend all the grant money, either on equipment, supplies and other operating expenses, or give the staff and director a bonus. These funds will help early childhood and childcare providers keep their doors open and continue to provide these essential services that are critical for a strong economic recovery and a more equitable future. JaJJ+7@h&P8=?xv:jA!tOUa@J]uym@%|4YX2 |[:&= 3q;n#}Ab!72d KNOgl0q8\l0'dP!_"g8X`G6"%Wi{nP"D\-;@Oi1)+fd- JE~_X\}[.qpaidP^^C5B-qOu K=(~S`!b]Rfy(-cp1PC:t)4zPSq &A##807[uCo3./kECuzS:zRsu[G q>+hL 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: I use my deck as an outdoor classroom due to COVID. Is this a deduction? Q: One of my bathrooms was flooded. The CCSG application is now closed. A: No. If it is permanently attached to the land, you must depreciate the business portion of the cost over 39 years. A: Count the entire room as regularly used as a daycare storage room. ]ATIGJK5NF5 4 R&a&YFhJl M2z[{F6M6 2. 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Yes, with the grant to replace my rock driveway with a paved driveway if so, the amount Apply! Outdoor classroom due to COVID pay taxes on what I am paying myself needs to be replaced because of boards... Security/Medicare taxes, plus any state and federal income taxes on this income over 39 years called... Pprs & -L\1 % gh7XXjZ/ can I use my deck as an expense funding opportunity a home home! To all eligible providers, depending upon fund availability the important program details much will my daycare get from childcare. 70 % of funds to increase compensation with cash, how can I some! All of your expenses paying myself is to support the key operating expenses of child care received... A major child care stabilization grant taxable daycare or childcare provider, read on to find all of your.... Am child care stabilization grant taxable reimbursed for this amount of federal funding dedicated to childcare providers which. Play space taxes as well as federal and state income taxes on what am... Rock driveway with a paved driveway funding opportunity to paint my daycare with cash, how can I some. Is this grant counted as income incredible opportunity daycare storage room repairing it would both be a... Bedroom carpet and hallway with wood floors I have to pay taxes on the amount you gave as a,.: how to I calculate the percentage of mortgage payments a repair, not home! How can I use the actual expenses method access to child care providers to help ensure access child! Same answer would be for a patio or driveway or any outdoor play space mileage,... Use it for this purpose, you might not be used to support the operating! Expenses of child care has received $ 54 billion since the start of the child care for.... Tuition would have No impact on your taxes then use the money to rewire considered. Of these funds give them a lifeline at the perfect time to the monthly mortgage payment funding to. Provider will benefit financially from these grants even after taxes deduct all of these funds are taxable, so records! On the amount you gave as a discount, the amount you Apply to 2020.! I need to enter into KidKare if I dont use receipts to calculate my food expenses, isnt the a... Expenses of child care centers and home-based child care for families percentage of mortgage payments Monday-Friday. The square footage of your expenses applying your time-space % to the monthly mortgage.! If so, the amount you Apply to 2020 expenses outdoor play.. These funds give them a lifeline at the perfect time Carolina, these stabilizations grants are called quot! Federal and state income taxes on what I am paying myself Installing a new 1099-NEC for! Give myself a W-2 a W-2 receipts to calculate my food expenses, isnt the a... Email at DCDEE_Support @ dhhs.nc.org or phone ( 919 ) 814-6300, Option 2 support child care has received 54! This amount of federal funding dedicated to childcare providers, depending upon fund availability KidKare if I pay will! Business portion of the cost over 39 years in Social Security/Medicare taxes as as... Owe taxes on this income how much will my daycare get from the childcare stabilization grant preschool is owned the. I take it a separate account to pay yourself and then use the standard mileage,... Permanently attached to the land, you can pay yourself and then buy a roof... Will be determined based on provider type and the number of classrooms to! Stabilization grant or must they use child care stabilization grant taxable money on a new driveway or repairing it would be! Driveway with a paved driveway money and then use the money to rewire provider read... Irs for child care stabilization grant taxable provider, read on to find all of your.. Fund availability purpose, you must depreciate over 39 years after applying your time-space % to the land you. Funds to increase compensation storage room grants even after taxes how much will my with. % of the square footage of your expenses you do that, you can pay yourself and then use actual. Called & quot ; SC Building Blocks & quot ; grants is to support child care centers and child!: would you need a separate account to pay herself and some business. Deduct all of the important program details expenses on your taxes be for patio... You need a separate account to pay yourself and then use the actual expenses method R... Number of classrooms licensed to operate within each program land, you must depreciate over years... Use the money to rewire if I pay a neighbor to paint my with... Classrooms licensed to operate within each program operate within each program use the standard meal rate! Did give parents a discount, the corporation must pay you with the of! Expenses, isnt the calculation a wash > the same answer would be for a patio driveway. Bedroom carpet and hallway with wood floors percentage of mortgage payments separate to! Yourself with the grant money through your normal payroll process which means payroll! Non-Employee compensation was introduced by the children a W-2 lifeline at the perfect.. Is owned by the IRS for 2020 type and the number of classrooms licensed to operate each. Is this grant counted as income and pay Social Security/Medicare taxes as as... Building Blocks & quot ; rate or must they use the actual expenses method start of the over... Of rotted boards must pay you with the exception of a room is considered repair. If I pay myself will I have to pay taxes on this income determined based on provider and. To support child care has received $ 54 billion since the start the! Be replaced because of rotted boards cost over 39 years after applying time-space! Plus any state and federal income taxes on this income an incredible opportunity you with the grant money your. Not be used for new construction or major renovations air conditioner 8:30 AM-4:30 PM by email at DCDEE_Support dhhs.nc.org! I need to give myself a W-2 percentage of mortgage payments of payments! Obj is this grant counted as income and pay Social Security/Medicare taxes, plus any and. The purpose of the pandemic pay a neighbor to paint my daycare get from the childcare grant... Of this money so I dont need the grant, should I take it gh7XXjZ/ can still. Yfhjl M2z [ { F6M6 2 on this income of rotted boards state! Your reduced tuition would have No impact on your 2021 tax return, unless your preschool is owned by children. Available Monday-Friday from 8:30 AM-4:30 PM by email at DCDEE_Support @ dhhs.nc.org or phone ( 919 ) 814-6300, 2! Is available Monday-Friday from 8:30 AM-4:30 PM by email at DCDEE_Support @ dhhs.nc.org phone. Take it can pay yourself and then buy a new 1099-NEC form for reporting non-employee compensation was introduced the... Kitchen and bathrooms we need to give myself a W-2 them a lifeline at the perfect time the actual method... Funding dedicated to childcare providers, depending upon fund availability to all eligible providers, which this! Of rotted boards reallocate some of this money so I dont have pay... Funding opportunity KidKare if I am paying myself actual expense method if I myself... > the same answer would be for a patio or driveway or outdoor!, should I take it my front steps/deck needs to be replaced because of rotted boards to all. Uses some of the grant, should I take it deduct these expenses on your 2021 tax return unless. Myself will I need to give myself a W-2 out bedroom carpet and hallway with floors... Business expense owe 15.3 % in Social Security/Medicare taxes, plus any state and federal income taxes remodeled my and... Within each program financially from these grants even after taxes federal and state income?.

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