Will I have to pay taxes on what I am getting reimbursed for? Providers who received funding during the first round must complete an expenditure report before . All programs will receive a 1099 for grant funds received. A: You can pay yourself with part or all of the grant money. You can pay yourself and then give him a bonus. Our goal is to help your program become financially secure. A: Yes. Q: Do I have to have a child care license by March 21, 2021 to receive the Stabilization grant? There is not law that requires you to stay in business. Q: I have remodeled my kitchen and bathrooms. All $20 million of the One-Time Supplemental Stabilization Grant funds was awarded in January 2022. x\n}}XXc;E8qNDVEID1YYq>_>~}S]}Wc]>}Otgo> BV=}}%:}?=wg/o^_]}~wz7>a>nBN\%~\uB*ySF}G}Wa=dj_g='_=Z?J,iMrzsY=m.](&;n_?j-d7mw]6Y],fndy:y$V9M8nt}])6eSCgw\ms19@WaCo$zHOATq~3)S>Y } It doesnt matter if you havent lost any children. Q: Is the Paycheck Protection Program (PPP) taxable income? Q: Can I use the grant money to fully remodel my kitchen, put up new house siding, metal roof, new back deck? Example 3: Provider uses some of the grant to pay herself and some for business expenses. Congress declared that these programs are not taxable income. A: Installing a new driveway or repairing it would both be considered a repair, not a home improvement. If you cant get a clear answer from your state, you should pay yourself with the grant. Is the child care stabilization grant taxable? But, if you pay yourself, you can then use this money to purchase a home. Access to safe and reliable child care is the backbone of our economy and essential for employees to get back to work. Q: Do I claim the same time-space% I used last year? I feel like its just more income I have to claim and pay taxes on. A: You do not have to explain why you pay yourself and you dont need to show a loss. support provi ders unt i l June 2024. The provider should keep two copies of all receipts from purchases made so that one can be kept for her IRS records and the other can be used if required for grant reporting. Subsidized Child Care Stipends. Child Care Stabilization Grant Questions and Answers. A: Yes! You should amend your 2020 taxes and report it as income and pay taxes on the amended return. ! <> A: Apply your time-space% to the monthly mortgage payment. On another slide it says that state grants are taxable income. A: If you pay your husband you must treat him as an employee and file the W-2, not a 1099. A: I assume you are on payroll because you are being treated as employee of a corporation. Child Care Relief Funds The following applications are available to eligible child care providers to apply for relief funds. Q: Can I use the grant to replace my rock driveway with a paved driveway? Then put aside some money in a place that is low risk (bank savings account, short-term bond fund or money market account). Are those grants considered taxable income? Q: Can we pay ourselves in 2022 with grant money from 2021? Outdoor space is not considered part of the square footage of your home. How does this impact my taxes? Thats just how the law works, some are taxable, some are not. 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. . Supporting Family Child Care to Prepare for Child Care Stabilization Grants Take a before and after picture of the area he painted. Q: On one slide it says that the PPP and EIDL programs are not taxable income. How much will my daycare get from the childcare stabilization grant? 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. Many states are requiring that 20% of the grant be allocated to employees. A: No! Q: We are a non-profit preschool facility in our church. Q: Can I use the Stabilization grant for: Pay my employees life insurance premiums? Grant awardees will be determined based on provider type and the number of classrooms licensed to operate within each program. 2 0 obj How do you determine your salary? endobj Youll have to contact the state agency that administers this grant. No! A: I dont know. If you spend all of the grant money on items used exclusively for your business, you won't owe and taxes, but you won't have any money left over at the end of the year. Q: Is the Economic Injury Disaster Loan (EIDL) a Stabilization grant or is this a loan that must be repaid? You need to contact your state agency to get an answer. Q: I need a new washer, dryer and water heater. A: Depends on what your state says. The EIDL loan you must pay back. 9857 et seq. QtFA/MdTV' +` _-gNT_eS?o9u"V)p y[7 Q: What criteria is my state using to approve the Stabilization grants? Please consult your tax professional, if you have an income tax questions or concerns. 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. A: No. 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. You will report this as income and pay Social Security/Medicare taxes as well as federal and state income taxes on this income. Please be aware that all funds are taxable and will need to be spent no later than . stabilization sub-grants, applicants are required to provide owner/administrator demographics, program operational status, and program . Q: We started adding more kitchen cabinets this summer. 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. Dental crown not covered by insurance? Due to the ongoing hardship COVID-19 continues to place upon the child care industry, the North Carolina Division of Child Development and Early Education (DCDEE) will be extending the provision of operational grants to all private, licensed (or operating under a notice of compliance) child care centers and homes that are open to serve children and families . You will report less income in this situation, but you cant deduct anything that a parent owes you. Q: In my state the grant money can be used to reimburse expenses back to February 2020. Yes, if you are a for-profit organization this funding is taxable. A: You cannot deduct any costs associated with a dog or cat. Q: May I use the standard meal allowance rate to claim food expenses for an employee that eats food while working in my home? Q: If I dont use receipts to calculate my food expenses, isnt the calculation a wash? If so, the corporation must pay you with the grant money through your normal payroll process which means paying payroll taxes. *l.dyY Can I reallocate some of this money so I dont have to pay income taxes? NOTE: Child Care Stabilization Grant payments may be taxable. You will only save a small amount of money on your taxes when hiring your husband. For example, a family child care home provider may use the grant to pay her mortgage or rent, but only the portion (percent of the square footage) of the home that is used for the business is tax deductible. Act (Public Law 117-2) to help stabilize the child care sector via subgrants to child care providers due to the COVID-19 pandemic. I plan to discount the current family tuition evenly. The IRS has published information indicating that receipt of a government grant by a business is generally not excluded from the businesss gross income under the Federal Tax Code and therefore is taxable. You must claim grant funds in your businesss gross income. A: Each state sets its own criteria. 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. A: All non-profits should be filing a tax return, unless your preschool is owned by the children. Where to find more information Q: If my husbands is disabled and collects Social Security Disability Insurance, will it change to regular Social Security when he reaches age 70? The grants cannot be used for new construction or major renovations. A: If you are incorporated and are being treated as an employee of your corporation, then the corporation will report the grant as income. Once you apply, you will be told how much you will get. 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: You can claim expenses for your vehicle using either the standard mileage method or the actual expenses method. Q: On my grant report I listed mortgage and utilities as expenses. A: I am sorry to hear this. Q: I replaced the flooring in my kitchen. A: The PPP and EIDL programs are administered through the Small Business Administration. Can I still use the standard meal allowance rate or must they use the actual expense method? 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. Review the Instructions and Terms & Conditions prior to applying for each funding opportunity. No. See the funding breakdown by state, tribe, and territory, and more information about the grant on the. Q: Does it matter how much income I made this year to use the Stabilization grant to pay myself? The corporation can deduct your wages and payroll taxes. [1]This amount will depend on the state in which the provider lives. June 02, 2021. I thought it was seven years. A: No. A: Yes, with the exception of a home, home improvement or home addition. The utilities and internet are combined. You would report $5,000 as income and $2,000 as an expense, and end up paying taxes on the difference, or $3,000. Whenever a provider sells her home, she will always have to pay tax on the depreciation you claimed, or were entitled to claim! A: Social Security will look at your net income. Yes. A: You must report Food Program reimbursements as taxable income. Youll have to contact Social Security directly. Q: When you give a bonus to your staff, do you treat the deduction the same as payroll deductions? If he did not, have him amend your tax return and not charge you for doing so, since it was his mistake. Q: How to I calculate my Time Percent when children are in my care 24 hours a day? Grant money through your normal payroll process which means paying payroll taxes, applicants are to! In my state the grant owned by the children a Stabilization grant or is this a Loan that must repaid... Did not, have him amend your tax professional, if you are a non-profit preschool facility in church... Of classrooms licensed to operate within each program apply, you should amend your tax professional, if you a. Assume you are being treated as employee of a home improvement for business expenses the first round complete! 20 % of the grant to pay income taxes on are not grant:! Stabilization grant the Instructions and Terms & amp ; Conditions prior to applying each. 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