For example, providing families with sanitation and cleaning supplies to use at home would have little to do with the provision of child careand, therefore, would be an unallowable CCDF expenditure. As noted at section 45 CFR 98.21(a)(3) of the CCDF rule, Lead Agencies are prohibited from increasing the family co-payment amount within the minimum 12-month eligibility period (except for families eligible through graduated phase-out). , Expenditures and Obligations, applies. PDF (256) 362-3852 ext. 31 - Alabama It is also important for providers to know that not all business expenses are fully tax deductible. Section 658M(b) of the Child Care and Development Block Grant (CCDBG) Act, 42 U.S.C. These grants are in addition to other pandemic-related relief funds (e.g., CARES grants, Paycheck Protection Program loans, EIDL loans). In addition, the Coronavirus Aid, Relief, and Economic Security (CARES) Act (Public Law 116-136) and Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act of 2021 (Public Law 116-260) provided a combined $13.5 billion in supplemental CCDF program funds to help State, Territory, and Tribal Lead Agencies address COVID-19 impacts, as well as some additional flexibilities for the use of those funds. Absence due to the need to care for a family member or an illness; Any reduction in work, training or education hours, as long as the parent is still working or attending training or education; and. Tribal lead agencies should describe how the child care sector will be maintained while using the ARP Act stabilization funds for construction or major renovation. FMAP rates and state matching requirements are published on the GY 2020 state and territory CCDF allocation tables page. Yes, lead agencies may incentivize subgrant recipients to implement certain policies, such as higher pay for staff. The amount you pay yourself has nothing to do with how many hours you work or when you work. 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? Furthermore, for family child care providers, whether the child care stabilization funding counts as income also depends on whether it is used as income by the family child care provider who receives it. If approved, these waivers may temporarily exempt Lead Agencies from meeting health and background checks requirements. Programs that are awarded a grant will receive an IRS Tax Form 1099-NEC. 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 Act Q: My business is an S Corporation. The Child Care Stabilization Grant is a $700 million investment in child care providers across Michigan. To access your existing Child Care Stabilization Grant application, please go to childcare-grants.ocfs.ny.gov. Child Care Relief Funds | Early Connections - Missouri Incentives for providers may be considered an allowable expenditure in the CCDF program if the incentives are used as part of quality improvement or other activity that meets the purposes and goals of CCDF. It is only FFN providers that are required to be license-exempt and serving children accessing subsidy. Maybe. Further, expenses incurred by the intermediaries that are not part of the subgrant (i.e., passed through to an eligible child care provider) will count against the set-aside of either up to 10 percent for states and territories or up to 20 percent for tribal lead agencies. In addition, all tribal lead agencies were allocated $30,000 as a base amount of the ARP Act stabilization funds prior to allocating funds based on the number of children served. When considering the size of a child care program, lead agencies should use enrollment and/or licensed capacity rather than attendance. PDF Overview of ARP Act Child Care Stabilization Guidance It is important that Lead Agencies have a plan in place to perform essential functions and achieve programmatic continuity during and after an emergency or disaster for families receiving CCDF benefits. 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. , and ARP Act supplemental) and regular CCDF funds to also help providers become CCDF-eligible. . A: Head Start and ECEAP are not eligible. Every program with a distinct license number will need to apply individually. The Child Care Stabilization Grant is income to your business and is taxable by the state and federal government. Lead agencies that want to exempt essential workers from the family asset test must request and have an approved waiver from ACF. Collect information from providers describing their current operating expenses (e.g., tax returns). If you do so, this will help support the work I do helping family child care providers be more successful as a business. PDF Child Care Stabilization Grant Tax Implications - State of Michigan She may keep the funds in the bank account as an emergency fund for later use or she can spend it as she wishes. - No. 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? PDF Child Care Stabilization Grant Tax Implications - Vibrant Futures 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. 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. In other words, there is nothing in the CARES Act that specifically exempts CCDF CARES Act funding from taxation. However, lead agencies do have flexibility in defining unlimited access, and we are deferring to lead agency interpretation, as long as it is recognizably reasonable to the average person, as to how to maintain this policy while balancing health and safety concerns related to the Coronavirus Disease 2019 (COVID-19) public health emergency. Is the child care stabilization grant taxable? the Child Care Grant Portal. Pay my employees life insurance premiums? The supplemental appropriations under the CARES Act and the CRRSA Act can be used to provide child care assistance to health care sector employees, emergency responders, sanitation workers, farmworkers, and other workers deemed essential during the response to the coronavirus, without regard to the income eligibility requirements. The CARES Act and the CRRSA Act do not address use of funds for construction or renovation; accordingly, regular CCDF/CCDBG rules apply. ). Further, child care providers should keep certain things in mind when determining how to interact with parents in order to control COVID-19. Yes. Child Care In New Jersey - FAQ Base amount funds can be used for any approved CCDF activities and are not restricted by spending requirements. October 12, 2021 Webinar Q: Can Head Start and ECEAP apply? This only applies to Tribal CCDF Plans and not to tribes with approved Public Law 102-477 Plans. Lead agencies have the discretion to decide which child care providers are included in their ARP Act stabilization subgrant programs. In order to request temporary waivers for extraordinary circumstances in response to emergency situations, the Lead Agency must submit a written request to the Office of Child Care (OCC) Director (with a copy to the OCC Regional Program Manager), indicating the reason why the Lead Agency is requesting the waiver including a description of the extraordinary circumstances. Stabilization Grants and New Tax Changes for 2021: Webinar Recording and is required within 60 days of the effective date of the requirement. Nearly all child care programs in the state more than 4,400 have received North Carolina Child Care Stabilization Grants, made possible by funding from the 2021 American Rescue Plan Act . , including that lead agencies retain overall responsibility for the administration of the program and administrative and implementation responsibilities undertaken by the intermediary must be governed by written agreements. 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. If after viewing this video and reading these questions and answers, you still have questions, feel free to send me an email at tomcopeland@live.com. 116-127) added a temporary FMAP increase of 6.2 percentage points beginning January 1, 2020, and continuing through the Coronavirus Disease 2019 (COVID-19) public health emergency period. Tom Copelands Blog: Taking Care of Business You will probably owe no more than 40% of the grant in taxes. CARES Act funds (including those used for construction and major renovation) must be liquidated by September 30, 2023. A: You can include it either on line one (Gross receipts) or line six (Other Income). Q: When you give a bonus to your staff, do you treat the deduction the same as payroll deductions? Family child care providers must report any portion of the stabilization grant that they use to pay themselves as taxable income on their federal and state income tax return (unless their state chooses to make the grant not taxable). Are child care stabilization grants taxable? However, the ARP Act stabilization funds are meant to support the child care sector during and after the COVID-19 public health emergency. 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. In those circumstances, the ARP funds would not affect an individuals annual income used to calculate the individuals portion of rent. Thus, a policy that terminates the receipt of the subsidy at redetermination for a child who is otherwise eligible is inconsistent with the law and the rule. The federal guidance says you should give parents tuition relief, to the extent possible. This is not a requirement. The subgrant applications may include check boxes for providers to select, and the lead agency may treat submission of the application as the certification. (45 CFR 75.2 A whole house generator? If you need help finding the address the 1099 was sent to, reach out to your . for more information. Q: How do I find out where to apply for this grant? Lead Agencies may temporarily lower a familys co-payment while the family is experiencing temporary or non-temporary job loss. Lead agencies do not have to require additional information at the time of the application as part of the certification process. However, as stated above, efforts to increase access to licensing is considered a supply building activity. These incentives are considered quality expenditures. Supplemental Funds Congress awarded additional (or supplemental) funds to the CCDF program through several COVID-19 relief packages (i.e., the CARES Act, the CRRSA Act, and the ARP Act). and are subject to the same obligation and liquidation periods for the stabilization funds. Can I reallocate some of this money so I dont have to pay income taxes? They are: For the purposes of determining CCDF eligibility and co-payment amounts, a Lead Agency may treat the UC benefits from the CARES Act or the CRRSA Act differently from the way it treats regular UC benefits. The CCWS Grants are funded with Child Care Stabilization Funds provided by the American Rescue Plan Act. The CARES Act and the CRRSA Act do not address the minimum 12-month eligibility period for essential workers; accordingly, regular CCDF/CCDBG rules apply. Care provided in emergency situations should be of the highest quality that is reasonably practicable given the particular circumstances. Example 3: Provider uses some of the grant to pay herself and some for business expenses. Agreements with intermediaries should include a requirement for intermediaries to collect and report data to lead agencies on a regular basis, as lead agencies will be expected to report on this information. While the guidance in this response focuses on how ARP stabilization funds impact the eligibility of child care workers for federal benefit programs, the same guidance would apply to funding from regular CCDF funds and supplemental funds provided under the CARES Act, CRRSA Act, and ARP Act, when the funds are used as stabilization grants or similar provider grants/stipends. The Child Care Stabilization Grant is income to your business and is taxable by the state and federal government. Yes, CCDF lead agencies may reprogram regular CCDF, CARES, or CRRSA funds until the obligation deadlines, which is September 30, 2022, for CARES and CRRSA. 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. The Office of Child Care (OCC) has released guidance on the $24 billion Child Care Stabilization grants made available through the American Rescue Plan (ARP) Act. As a reminder, child care providers must confirm the data used and the estimated current operating costs as part of their applications. Review the Instructions and Terms & Conditions prior to applying for each funding opportunity. Lead Agencies have the option to continue serving the child until the next eligibility redetermination, and may establish eligibility periods longer than 12 months. Lead agencies should balance the need to collect information necessary to ensure funds are being spent correctly and not overly burdening providers. Child Care Stabilization Grants / Minnesota Department of Human Services OCC encourages child care providers to provide relief from tuition and copayments, if financially possible, especially for low-income families. However, there may be some situations where child care stabilization funding should not be reported as income by a family child care provider (e.g., if the funding were used to cover rent, and if that did not affect a recipients net income). Lead Agencies also have flexibility in treatment of regular UC benefits. $1,000 Hiring and Retention Bonuses Also Being Paid to Child Care Workers. Child Care Stabilization Base Grants will be available to all eligible providers on a monthly basis beginning September 2021. State and territory lead agencies provided information on their implementation of stabilization grant funding plans in their FY 2022-2024 Child Care and Development Fund (CCDF) Plan, Q 4.1.8e due July 1, 2021. ), Child care stabilization subgrants included in the ARP Act The Stabilization Grant is a non-competitive grant for child care providers to help stabilize operations and support the health and safety of children and staff. . In an effort to properly balance these interests, consistent with statutory and regulatory restrictions on the use of CCDF for school, we offer the following: A CCDF Lead Agency has the option to use CCDF to pay for tutoring or academic support services, but only if meeting all of the following conditions: Yes, electronic equipment is an allowable use under CCDBG as an activity to improve the quality of center-based, home-based, or in home child care services provided for school-aged children (45 CFR 95.53(a)(10)). 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?, These are some of the many questions Ive received during my February 10th webinar How to Save Money on Your 2021 Taxes.. Contribute to a SEP IRA or Roth IRA? Such temporary changes would not impact the amount of care the child would receive. 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. How can I use this grant money? These payments count as a rebate or advance payment of a credit that are exempted as income. Lead agency agreements with intermediaries must meet CCDF requirements at 45 CFR 98.11 However, ACF strongly recommends that Lead Agencies first consult with their jurisdictions public health agency, seek advice on how best to proceed, and coordinate any actions. Yes. The ARP child care stabilization funds would be considered self-employment income for the child care providers since they are not universally exempted from SNAP eligibility determinations by law. Mental health supports for children and employees. The application must justify that the construction/major renovation activity is for the purpose of preventing, preparing for, and responding to, COVID 19. You would report $5,000 as income and $2,000 as an expense, and end up paying taxes on the difference, or $3,000. A: Yes. Stabilization Grant Guidance FAQs - Child Care Aware of America A provider may look up the address of the facility on the interactive map and see the SVI score. Apply for a waiver to use CCDF funds to provide direct services to families who do not meet CCDF eligibility requirements (e.g., with income above 85% of State Median Income; see note above regarding additional flexibility regarding use of the CARES Act and CRRSA Act CCDF program funds) and/or providers who do not meet CCDF health and safety requirements. The ARP Act stabilization funds are designed to support the child care market as a whole by covering business related expenses. 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. Emergency and post-stabilization services, including those for specialized behavioral health, are rendered without the requirement of prior authorization of any kind. Therefore, the lead agency may use the size of the child care program as part of their formula for estimating current operating expenses. Stabilization funds can only be used for services necessary to maintain or resume child care services. Paying another entity to handle the applications for stabilization funding does not fall into this category. Please note that any changes to a states definition of income to take advantage of this flexibility must be reflected in a CCDF plan amendment. As such, states and territories cannot use CARES Act or CRRSA Act funds for construction or major renovation. OCC will review construction and major renovation applications to make sure that the use of ARP Act stabilization funds for construction or major renovation will not result in a decrease in the level of child care services provided in the service area. Some activities would be clearly unallowable like using CCDF to pay for teachers employed by the schools during the school day when the school is in session, but many circumstances in the COVID-19 context are more nuanced. 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. The terms included in the Act are broad, and lead agencies have the flexibility to define them.
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