Child Care Stabilization Grant Tax Implications (michigan.gov) 19. Important note: Although there is federal guidance on how the Stabilization grants are to be administered, each state may interpret this guidance slightly differently. That's according to a recent national survey of early childhood educators, which found 63.3% of Wisconsin centers are experiencing staffing shortages and that . The definition of what counts as income for the EITC is determined at the federal level and includes all income reported to the IRS as part of a tax filers Adjusted Gross Income (AGI). Is the Child Care Program Stabilization Funding taxable? Because Family Child Care (FCC) providers capacity changes with enrollment, all FCC sites will be calculated using a capacity of 10 slots, regardless of the actual capacity, for the purposes of the formula. Thank you for your website feedback! As part of their ARP Act stabilization subgrant application, child care providers must certify they will pay at least the same amount in weekly wages and maintain the same benefits for each employee throughout the duration of the subgrant. Is the child care stabilization grant taxable? These funds represent an unprecedented opportunity that will be difficult to realize without adequate staffing. Stabilization Grants Lead Agencies have the flexibility to consider whether a provider has received funds from other federal or state programs in deciding how best to direct CARES Act and the CRRSA Act resources, but are encouraged to support providers through this child care crisis. Tribal lead agencies must also ensure that throughout the subgrant period, the tribally operated center meets the certification requirements, including implementing health and safety policies in line with local guidelines, continuing to pay at least the same wages and benefits to staff as those in place at the time of application, and to the extent possible, providing relief from copayments and tuition for families. Are available COVID-19 testing capacities meeting the needs of the community or would increasing testing in child care draw limited testing capacity away from populations with greater risk and exposure (e.g., health care workers and nursing home residents and workers)? CRRSA funds (including those used for construction and major renovation) follow CCDF Discretionary funding requirements and must be obligated by September 30, 2022 and liquidated by September 30, 2023. An Office of the Administration for Children & Families, for an existing multiyear construction project. EEC will notify programs in advance if a review at the program location will occur and whether the review will be conducted on-site or remotely. Other investments to improve program quality such as supplies, curriculum, screening tools, etc. This means that funds used to create a licensing department would count toward quality activities or non-direct services rather than administrative purposes. For protective services cases, the Lead Agency has the option to waive the family co-payment (in accordance with 45 CFR 98.45(k)(4)) and may waive the income eligibility requirements on a case by case basis in accordance with 45 CFR 98.20(a)(3)(ii)(A). We encourage Lead Agencies to take steps to assure that the hazard pay reaches staff actually providing care for those providers. Any program that has closed permanently is not eligible to receive continued grant funding. You will owe 15.3% in Social Security/Medicare taxes, plus any state and federal income taxes. Here are the government resources for the Child Care Stabilization Grant by state: The Child Care Stabilization Grant is part of the American Rescue Plan Act (ARP Act) (Pub. A: You should absolutely take it. Q: If I pay myself will I need to give myself a W-2? Because efforts to increase access to licensing are considered a supply building activity, funds from this set-aside could be used to create a child care licensing department for the tribe. Q: Can I use this grant to pay myself? Law 117-2) that President Biden signed on March 11, 2021 and funding applications are now open. You can use it for free during a 30 day trial period. Contact the C3 Help Desk: 1-833-600-2074 eecgrantsupport@mtxb2b.com. Pursuant to Title VI of the Civil Rights Act of 1964, the Americans with Disabilities Act (ADA) and other nondiscrimination laws and authorities, ADES does not discriminate on the basis of race, color, national origin, sex, age, or disability. The request must also provide sufficient detail on the provision(s) from which the Lead Agency is seeking temporary relief and how relief from the sanction or provision, by itself, will improve the delivery of child care services for children and families. A: You can include it either on line one (Gross receipts) or line six (Other Income). Programs should spend all funding in accordance with the specific requirements of each grant program. There are only limited circumstances under which the Child Count can change. Regarding Federal taxation, please contact the Internal Revenue Service for guidance. Below are the steps you will need to take to obtain a listing of your paid amounts. OCC strongly encourages lead agencies to use a portion of their set-aside to cover the cost of staffing necessary to administer and process the subgrants in a timely, transparent, and effective manner. It would also be allowable for the Lead Agency to use CCDF quality dollars to provide grants to impacted child care providers to improve quality and/or maintain the supply of child care. 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. If a program is in inactive status for a full month, they are not eligible for grant funding during that month. Lead agencies have the discretion to decide which child care providers are included in their ARP Act stabilization subgrant programs. FCC programs do not have to serve 10 children at the time of application. Therefore, the lead agency may use the size of the child care program as part of their formula for estimating current operating expenses. receipts, checks), c. Reviewing C3 training materials provided by EEC. ACF strongly encourages that lead agencies disregard this funding when determining eligibility for CCDF. Get more information about KidKare. If approved, these waivers may temporarily exempt Lead Agencies from meeting health and background checks requirements. Examples of changes that would require a waiver include exempting providers from some or all health and safety standards, health and safety training requirements, background check components; suspending annual inspections of providers; changing income eligibility to be higher than 85% of State Median Income; or changing the subsidy eligibility period to be less than 12 months. Specifically, providers serving children who receive CCDF services would need to meet requirements for health and safety standards, training, inspections, and background checks. State SNAP agencies will have to determine on a case-by-case basis what portion, if any, is excludable based on how the providers received the funds and how they are spent. Regular CCDF funds or COVID relief funds (CARES Act, CRRSA ActVisit disclaimer page, and ARP Act supplemental) have a limit of 15 percent of funds that can be used for administrative purposes. View a submitted Stabilization 1.0 or 2.0 grant application by clicking the button below: View a Submitted Application Stabilization Help Line: 844-863-9319 Income is a wholly different financial test from the assets test one could have very little income, but significant assets, and vice versa. You should amend your 2020 taxes and report it as income and pay taxes on the amended return. Parents may need additional hours of child care during the time they are receiving or recovering from a COVID-19 vaccine. A lock icon ( For example: The August 2022 CCSG report must be submitted by September 30, 2022. Alternatively, CCDF Lead Agencies also have the option of interpreting the prohibition as applying only during times when schools are open for in-person classes, since there may not be a regular school day during times when schools are closed for in-person classes. Funded by supplemental Child Care Development Block Grant funds through the American Rescue Plan Act (ARPA), this opportunity is intended to help stabilize the cost of maintaining child care programs by supporting the child care workforce, reducing the financial burden of child care for families and ensuring a safe and healthy environment. January 10, 2023. What type of private information should not be submitted during the fiscal monitoring review process? You will have to withhold and pay payroll taxes on these amounts. For example, a Head Start program licensed by the state as of March 11, 2021, would meet the definition of eligible provider at section 2202(a)(2)(B)Visit disclaimer page. $3,500 income $3,500 expenses = $0 taxable income and $0 taxes owed. Additional information is available at: https://www.irs.gov/coronavirus/employer-tax-credits. For all of the above answers that were No, you can still pay yourself and then use the money for these purposes. Lead agencies have wide discretion in how subgrant amounts are formulated, including how current operating expenses are calculated. During the review process, if additional information is required or revisions are needed, the program will receive an email through LEAD asking for specific revisions. Yes, lead agencies may determine which provider types to include in their stabilization subgrant programs, as long as those providers are eligible and qualified as defined in the ActVisit disclaimer page. However, under the CCDBG Act and CCDF rule, regardless of whether a child is physically at school or not, it is not allowable to use CCDF for any regular education services for which students receive academic credit toward graduation or any instructional services which supplant or duplicate the academic program of any school. The remaining funds may be used for administering the subgrants, providing technical assistance and support for applying for and accessing these subgrants, publicizing the availability of these subgrants, carrying out activities to increase the supply of child care, and providing technical assistance to help child care providers meet certain policies. The Frequently Asked Questions (FAQs) describes how Lead Agencies can support the stability of the child care sector during and after the COVID-19 public health emergency and measures to prevent, prepare for, and respond to coronavirus. When receiving multiple streams of funding from EEC and other agencies, it is recommended that child care programs: How can a sole proprietor of an FCC account for and document payments to themselves? If the program is closed during parts of the year due to schedule (e.g., operational only during the school year), they would not be eligible to apply for a subgrant during that time. Yes, the ARP Act requires lead agencies to make available on the lead agencys website an application for qualified child care providers (section 2202(d)(2)(D)(i)Visit disclaimer page. Funds will be available to child care providers in the form of: State tax rules apply. In addition, expenses for this purpose are reported on the ACF-696 of ACF-696T CCDF Financial Reports under the non-direct services for systems expenditures, which are not subject to the five percent cap on administrative expenditures (45 CFR 98.54(b)(1)). What is the New Child Care Stabilization Grant? A: No, because paying yourself does not create a deduction. The application process and distribution structure varies from state to state, so check your local government website to confirm application deadlines and important dates. Recipients of the C3 grants are not required to spend funds within the same month they are received. Lead agencies may use part of their set-aside and other COVID-19 funds (i.e., CARES, CRRSAVisit disclaimer page, and ARP Act supplemental funds) to help providers open or reopen. Yes, tribal lead agencies may use ARP Act stabilization funds for an existing multiyear construction project. How many months of funding will a program receive? Q: Can I pay myself in one lump sum or do I have to pay myself weekly or biweekly? OCC has not released specific guidance that addresses all possible scenarios related to categorizing regular educational services for school-aged children that would not be eligible for CCDF subsidies. Information and resources to help CCDF Lead Agencies and providers understand, administer, and access child care stabilization grants. All CCSG providers approved for the award between July 2021 and September 30, 2022 will be paid monthly through June 2023. Using a reimbursement model, management and reporting is easy and takes the burden off your HR team. Providers must report as taxable income all the money they receive from the Stabilization Grants Explore Tom Copeland's "Child Care Stabilization Grants and New Tax Changes for 2021." and The Tax Implications of the Child Care Stabilization Grants to learn more Resources from Tom Copeland's website 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. Top-requested sites to log in to services provided by the state. Sept. 1, 2021: The Office of Child Development and Early Learning (OCDEL) is making American Rescue Plan Act (ARPA) Stabilization Grants available to eligible child care providers. Why does the child care stabilization grant matter? I plan to discount the current family tuition evenly. See the funding breakdown by state, tribe and territory, and more information about the grant on the White House American Rescue Plan Funding Fact Sheet. How should a program manage/account for having multiple streams of funding from EEC and other state agencies? The Child Care Relief Fund Technical Assistance Team can be reached by emailing CCReliefFunds@trelliscompany.org or calling 1-833-613-3192. Frequently Asked Questions related to the Child Care Stabilization Grants from the Department of Early Education & Care (EEC). If a Lead Agency obligated funds during that time on activities that meet CCDF requirements and were not charged to their FY2018 CCDF allocation, it could re-purpose those funds and instead claim the obligation against uncommitted funds for FY2018 and liquidate those funds in order to meet the liquidation deadline for FY2018. Frequently Asked Questions will be updated on this page. The CCDF rule allows for copayments to be waived for families whose incomes are at or below the poverty level for a family of the same size, for children in protective services, or other criteria the Lead Agency establishes. Can I reallocate some of this money so I dont have to pay income taxes? Such a record could say, February 23, 2022 - $4,000 pay myself with the Stabilization grant.. The $39 billion will be provided through two funds: (1) $24 billion in child care stabilization funding for child care providers to reopen or stay open, provide safe and healthy learning . Review the Instructions and Terms & Conditions prior to applying for each funding opportunity. These stabilization funds are time-limited resources that are intended to stabilize the child care sector and workforce. Now you are on the Dashboard page, scroll down to the Recertification Section. First, Lead Agencies can consider re-purposing other obligations in FY2018 or FY2019. The ARP Act stabilization funds are designed to support the child care market as a whole by covering business related expenses. Stabilization Help Line: 844-863-9319 Hours: Monday - Friday, 8:30 AM - 4:30 PM The tutoring or academic support services do not occur during the regular school day pursuant to 42 U.S.C. 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. For example, if an application was submitted such that the first month of the grant is September, they would need to recertify at the beginning of October. Additional information for tribes that operate their CCDF program under a consolidated 102-477 plan is available here. Federal guidelines require that child care programs cannot reduce an employees hourly rate while participating in this grant opportunity. Purchases of or updates to equipment and supplies to respond to the COVID-19 public health emergency. Programs that permanently close are expected to notify EEC prior to their date of closure. As we all know, parents need access to safe, quality child care to get back to work. Extensive alteration of a facility such as to significantly change its function and purpose, even if such renovation does not include structural change. Alternatively, a Lead Agency may seek a waiver due to extraordinary circumstances that would allow double subsidy payments to two providers for the same child and period of service. For example, a shared framework might involve using a common provider subgrant application, developing a shared model for estimating child care provider operating expenses and setting subgrant amounts, and coordinating outreach to eligible child care providers. Lead agencies are encouraged to include center-based and family child care programs, as well as programs that serve school-age children. Retention of Child Care Staff. Third, Lead Agencies should review their own laws and procedures for expending and accounting for their own funds, and, where possible, proceed with the liquidation of existing obligations. A: Yes! (42 USC 9858c(c)(2)(N)(iv); see also 45 CFR 98.21(b)) This safeguards childrens continuity of care as parents move towards economic self-sufficiency. Q: If I was audited, would they just audit my grant or my entire business? Other funds are not within the scope of this review. At this time, there is not a federal spending deadline for programs receiving the C3 stabilization funding. Should I apply for the Stabilization grant?, Is the money I received from the grant taxable income, even if I didnt receive Form 1099?, Is it better to pay myself or spend it on my business?. The best way to manage your child care stabilization grant funds, White House American Rescue Plan Funding Fact Sheet, Perk Stipends: Everything You Need to Know, Download: The Ultimate Guide to Lifestyle Spending Accounts. More information is available from theWhite House American Rescue Plan Funding Fact Sheet. When considering changes to policies and program requirements, CCDF Lead Agencies have two main options for such changes: (1) Amend CCDF Program Requirements, through a Plan Amendment if Necessary, and (2) Apply for a Waiver for Extraordinary Circumstances, with subsequent Amendment if needed. The subgrant applications may include check boxes for providers to select, and the lead agency may treat submission of the application as the certification. She may keep the funds in the bank account as an emergency fund for later use or she can spend it as she wishes. Allowable changes to the tribes definition could include children who are tribal members, whose membership is pending, who are eligible for membership, and/or are children/descendants of members. There are two components of North Carolina's Child Care Stabilization Grants. Persons that require a reasonable modification based on language or disability should submit a request as early as possible to ensure the State has an opportunity to address the modification. Paying yourself involves nothing more than making a record indicating this. The Centers for Disease Control and Prevention (CDC) guidance suggests staggering drop-off and pick-up times and/or having a child care provider meet children outside of the facility when they arrive. Lead Agencies have fiduciary responsibility to protect the integrity of the CCDF program funds. KidKare is a comprehensive record keeping program that includes an accounting section that allows you to keep track of all your income and expenses. Yes, CCDF funds can be used to provide some sanitation supplies to families, provided that the supplies relate to the provision of child care. Major renovations (which are not allowable) include: Minor building updates or maintenance to the facility and/or grounds that do not change the fundamental structure of the building or alter the function or purpose of the facility (which are allowable). Child care providers that are receiving stabilization subgrants from a tribal lead agency must be serving at least one Indian child but are not restricted from receiving stabilization subgrants from a tribal lead agency if they also serve non-Indian children or have received a stabilization subgrant from a state. Stipulations for what the funds can be spent on and how to properly report them. The CCDF final rule at 45 CFR 98.16(aa) requires the Statewide Disaster Plan (or Disaster Plan for a tribes service area) to incorporate guidelines for continuation of child care subsidies and child care services. Welcome to the Child Care Strong grants, administered by MDHS's Division of Early Childhood Care Department. What dates matter for the child care stabilization grant? If a Lead Agency is unable to fully liquidate its CCDF FY2018 incurred obligations by September 30, 2020 due to the COVID-19 pandemic, there are three options to consider. Providers may also require additional screening processes, such as temperature checks and wearing masks, when feasible, during interactions. Where not addressed by OCC guidance, OCC will defer to Lead Agencies' reasonable interpretation of these decisions and encourages Lead Agencies to provide guidance to providers on implementation of this policy where they think it is useful. The use of home visiting services to refer/connect children to early care and education services is not by itself a sufficient connection to non-parental child care services to justify the use of ARP Act stabilization funds (or other CCDF funds) for home visiting services. If you are not selected for a review, you should still observe sound documentation practices and prepare as you may be selected for review or asked for supporting documentation by EEC in the future. Dental crown not covered by insurance? Tribal lead agencies must submit amendments to their current FY 2020-2022 CCDF Plan within 60 days of the effective date of implementation. Paycheck Protection. Is our grant amount $15k or $24-$52k? Such action can only be taken if such re-purposing is allowable under the Lead Agencys rules and if the funds being repurposed meet CCDF requirements and were obligated in FY2018 or FY2019. With limited exceptions, home visiting does not fall within any of these allowable uses. General Grant Questions Q1. The ARP Act does not address if a child care provider can terminate an employee for cause during this period. As required at 45 CFR 98.60(d)(4)(ii),Visit disclaimer page if the lead agency does not have an applicable requirement, the regulation at 45 CFR 75.2Visit disclaimer page, Expenditures and Obligations, applies. Afterwards it costs $99.00 a year. To prepare for an EEC fiscal monitoring review, you should consider: a. Documenting all expenditures made with grant funds by using the recommended Expenditure Tracker or a similar tool, that includes at a minimum: b. Program highlights follow below. The ARP ActVisit disclaimer page requires providers to certify that they will provide relief from copayments and tuition payments for the families enrolled in the providers program, to the extent possible, and prioritize such relief for families struggling to make either type of payment (emphasis added). If a lead agency chooses to provide stabilization subgrants to child care providers that are not licensed, regulated, or registered and have not previously received child care subsidies but are otherwise eligible to receive CCDF, for example relative providers, lead agencies are encouraged to collect additional details and documentation of operating expenses. Are the C3 Child Care Stabilization grants taxable? Grant navigators are available to assist child care providers with grant applications and other resources. When posting information, OCC recommends including details on how interested child care providers can contact the lead agency for more information on accessing and submitting an application. Resources to help develop communication strategies that will increase awareness and visibility of the child care stabilization grant program. There are two payment options: If an organization has more than one Massachusetts location, am I eligible to receive more than one grant? Though essential workers are not subject to the income eligibility requirement to receive child care services funded by the COVID-19 supplemental funds, they are subject to the other CCDF program eligibility requirements. Q: Where does the grant go on Schedule C? 32% of employers have seen some of their employees leave the workforce due to the effects of COVID-19. No, there is not a federal limit on the dollar amount of an ARP Act stabilization subgrant. If youre a daycare or child care provider, read on to find all of the important program details. Even if I didnt get Form 1099? You can deduct the amount you pay your assistant. In order to be a qualified child care provider and eligible to receive a subgrant, a child care provider must either be open to provide child care services or temporarily closed due to public health, financial hardship, or other reasons relating to the COVID-19 public health emergency at the time of application. Tom Copelands Blog: Taking Care of Business Tribal lead agencies may determine which provider types to include in their stabilization subgrant programs, as long as those providers are eligible and qualified as defined in the ARP Act. Yes, tribal culture or language preservation camps can receive stabilization subgrants.