A: Yes. Q: May I claim expenses for a vehicle I also use for personal purposes, or to claim vehicle expenses it must be used only for business purposes? 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. Not all applications are guaranteed to be approved. How much will my daycare get from the childcare stabilization grant? CARES Act Provides $3.5 Billion in Child Care Relief. The same answer would be for a patio or driveway or any outdoor play space. Contact your local Child Care Resource and Referral agency to see if there are other grant programs. You can use it for free during a 30 day trial period. Q: Is the Paycheck Protection Program (PPP) taxable income? Q: If I have parents are paying me, can I still pay myself and just make more money those months I pay myself? A: No, that would probably be considered a major improvement. Certificate of Registration: A statement issued by the Commissioner for a period of up to two years to a family child care home upon receipt of a self-certification statement 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. Congress declared that these programs are not taxable income. Q: I use my deck as an outdoor classroom due to COVID. You will report this as income and pay Social Security/Medicare taxes as well as federal and state income taxes on this income. If they say you cant use it for this purpose, you can pay yourself and then use the money to rewire. Q: Do I claim the same time-space% I used last year? Q: Is the Economic Injury Disaster Loan (EIDL) a Stabilization grant or is this a loan that must be repaid? Keep in mind that all of these funds are taxable, so maintain records of how you . ]ATIGJK5NF5 4 R&a&YFhJl M2z[{F6M6 Q: Does going back to college count as hours? The Child Care Workforce Stabilization grants supply funding to help child care providers recruit and retain qualified employees as the industry recovers from the pandemic. Paying for weekly house cleaner? She may keep the funds in the bank account as an emergency fund for later use or she can spend it as she wishes. Such a record could say, February 23, 2022 - $4,000 pay myself with the Stabilization grant.. See this from the AARP website. 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. Q: If I use the grant for my IRA, can I deduct 100% of this on my taxes? Can I reallocate some of this money so I dont have to pay income taxes? Child Care Grant: Phase 4. Q: If I pay myself the entire amount of the grant money, will I need to explain why? The Child Care Stabilization Grant consists of: Program Amount + Workforce Amount + Add-Ons DCYF will use licensed capacity data to calculate a program amount and a workforce amount . Stipulations for what the funds can be spent on and how to properly report them. <> 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%? It may be the same or may not. endobj Does that mean I cannot offer a monthly or quarterly bonus? Q: May I decrease wages for employees during the grant period? Yes. Q: Would you need a separate account to pay yourself? 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. Q: We started adding more kitchen cabinets this summer. 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? This webinar for training and technical assistance providers was presented on June 24, 2021. What if I am on payroll with my staff? Can I put it on my 2021 tax return? Your state may or may not see this as a major improvement. A: I dont know. Email Us at: providerhelp@childcaresolutionscny.org. There has never been this amount of federal funding dedicated to childcare providers, which makes this an incredible opportunity. Grant funding amounts and distribution schedule. A: You can claim expenses for your vehicle using either the standard mileage method or the actual expenses method. Ive created an instructional video that answers these questions and many more. Z~0^ I5%jE6)jh2!Z4Wq3 Consult with your accountant for more information. Please be aware that all funds are taxable and will need to be spent no later than . Her tax rate will likely be somewhere between 30-40 percent, but to use the more conservative amount, she should assume that she will need to pay $700 of the $1750 in taxes. child care, child and adult protective services, adoption, and child support services. Q: My large vehicle that I use for business and personal purposes needs a new transmission. If so, follow up with your state to make sure they are following their own rules. The Stabilization Payment Program Round 2 is a nine-month payment program that runs August 2022 through April 2023. A: No, you can offer as many bonuses as you want. Can I use the grant money for this or would have to pay myself first? 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. The answer is yes, these funds are taxable. 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. Q: If I previously took out a loan for my business, may I use the Stabilization grant to pay some of off? Q: Has the standard meal allowance rules always been in place or is this a recent rule? A: It depends on your familys financial situation. Q: Is a new roof a major or minor repair? Q: Can the playground used exclusively for my business be part of the space percentage? 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. Below is an additional series of questions and answers about the Stabilization Grant. Instead, start making contributions to your IRA. This bill, based on President Biden's bold American Rescue Plan, provides $39 billion in desperately needed child care relief funding. The application process and distribution structure varies from state to state, so check your local government website to confirm application deadlines and important dates. A: Yes, deduct your time-space% of the cost in one year. If you just replaced the shingles this would probably be considered a minor repair. Here is the recording of my recent webinar, "Child Care Stabilization Grants and New Tax Changes for 2021." The webinar covered: The tax implications of the Stabilization Grants What expenses can be deducted in your business How to calculate your Time-Space% And more Here's a copy of the power point slides. A: The EIDL loan is not forgivable, you must pay it back over 30 years. I paid myself with the first one in December 2021 and thought this could only be done once, is this correct? Get more information about KidKare. These grants are now available for eligible child care agencies in Tennessee. Q: If I only have one child, can I still apply for the grant? You would report $5,000 as income and $2,000 as an expense, and end up paying taxes on the difference, or $3,000. around the country, mostly small businesses, who were already operating on thin margins. Funds must be used to support the key operating expenses of child care providers to help ensure access to child care for families. There is no upper limit on how many hours you can claim. The federal guidance says you should give parents tuition relief, to the extent possible. This is not a requirement. A: You do not have to explain why you pay yourself and you dont need to show a loss. Report as income, the amount you received from parents. Contributions to an IRA will not reduce your Social Security/Medicare taxes. It affects how we all work when we can work and for many, why we work. If you are an employee, your employer is withhold Social Security/Medicare taxes and sending them on to Social Security quarterly. 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. Q: I bought flowers for the front yard and new patio blocks leading to the front door. Help is on the way! Did this change? 2 0 obj This funding is subject to the same state and federal tax rules as regular Child Care Development Fund (CCDF) funding. A: I assume you are on payroll because you are being treated as employee of a corporation. 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: If you do child care out of your own home, you are entitled to depreciate your home. If you do so, this will help support the work I do helping family child care providers be more successful as a business. Regarding federal tax rules, please contact your tax preparer or the Internal Revenue Service for guidance. Can I deduct this? The February 10th webinar was sponsored by KidKare. NOTE: Child Care Stabilization Grant payments may be taxable. Even if I didnt get Form 1099? Q: Can I claim Social Security on my ex-husband? Q: Can I use this grant to pay myself? Tax Resources from Home Grown. Q: If I was closed because I had COVID and didnt have parents pay during that time, how do I record using some of the grant to cover the lost revenue? Statement of Grant Opportunities Stabilization 1.0 Can I add a roof for shade, electricity, for fans, light and screens against insects. Q: Can we pay ourselves in 2022 with grant money from 2021? 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. 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