child care stabilization grant taxable

The application process and distribution structure varies from state to state, so check your local government website to confirm application deadlines and important dates. The dynamic environment associated with the COVID-19 pandemic has created new challenges for federal, state, and local policy makers charged with the administration of the CCDF program. A: Yes. Section 658M(b) of the Child Care and Development Block Grant (CCDBG) Act, 42 U.S.C. Child care providers may use subgrants to cover a range of expenses such as personnel costs; rent or mortgage payments; insurance; facility maintenance and improvements; personal protective equipment (PPE) and COVID-related supplies; training and professional development related to health and safety practices; goods and services needed to resume providing care; mental health supports for children and early educators; and reimbursement of costs associated with the current public health emergency. Q: If I pay myself will I need to give myself a W-2? Yes, Lead Agencies can provide hazard pay to providers that remain open during COVID-19. Purchase of a swim spa for physical therapy, exercise, relaxation? American Rescue Plan (ARP) Stabilization Funds. If you are a non-profit or not-for-profit organization, this funding is tax exempt. 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. Q: Can I use this grant to pay myself? FCC programs do not have to serve 10 children at the time of application. A: No. This means that funds used to create a licensing department would count toward quality activities or non-direct services rather than administrative purposes. Providers closed due to an inactive status pending the outcome of an investigation may not recertify until the investigation has been closed and corrective action has been approved by EEC. The tax implications of the grants depend on several factors, namely, how the provider uses the funds, the providers household income, and possibly the state in which they live. The Office of Child Development and Early Learning (OCDEL) made American Rescue Plan Act (ARPA) Stabilization Grants available to eligible child care providers. around the country, mostly small businesses, who were already operating on thin margins. Annual Training Costs. A: If your state audits how you spent the grant, it is not likely they will audit the rest of your business. Q: If licensed family childcare is allowed 12 kids max. 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. OCC also recommends that lead agencies be aware of allowable uses of funds and funding requirements with the multiple COVID-19 supplemental funds. Some child care businesses may qualify for tax credits to support paid sick leave while they receive a vaccine and recovery from any side effects. This only applies to Tribal CCDF Plans and not to tribes with approved Public Law 102-477 Plans. If the Lead Agency chooses to terminate assistance before the end of the eligibility period, the Lead Agency would be required to offer a minimum of 3 months of continued assistance. 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. Yes, lead agencies can use funding from the administrative, supply-building, and technical assistance set-aside of up to 10 percent for states and territories and 20 percent for tribes to cover personnel costs associated with administering the stabilization funds, including term-limited staff. Attestation: You have attested, when open and providing services, to implement policies in line with guidance and orders from state and local authorities and to the greatest extent possible the Example 2: Provider uses full amount for business expenses A: The Child Care Stabilization Grant consists of: program amount + workforce amount + add-ons. Below is an additional series of questions and answers about the Stabilization Grant. The Official Child Care Grants Assistance Portal for the State of Virginia. What happens after a program submits an application? You can pay yourself and then give him a bonus. Pandemic Unemployment Assistance, which provides benefits for up to 50 weeks to individuals who are not eligible for regular UC or extended benefits and who have been COVID-impacted with regard to their unemployment (minus any weeks of regular UC and Extended Benefits (EB) the individual received); Pandemic Emergency Unemployment Compensation, which provides an additional 11 weeks of benefits, through March 14, 2021, to individuals who have exhausted their rights to regular state or Federal UC benefits; and. Q: I gifted some of the grant back to parents because of COVID. The South Dakota Department of Social Services . Broaden the Lead Agencys definition of protective services to permit emergency eligibility as a temporary, short-term measure. Lead agencies may use their stabilization fund set-asides to carry out activities to increase the supply of child care, especially for historically underserved populations. These stabilization funds are time-limited resources that are intended to stabilize the child care sector and workforce. The law specifies that child care providers may use their child care stabilization funds on the following allowable activities: ARP Act stabilization funds cannot be used to cover family copayments or tuition. Can these funds be used to help cover the costs of consulting with a tax preparer? ACF additionally recommends seeking funding outside of CCDF to increase testing capabilities for the broader community. Q: If I use the grant for my IRA, can I deduct 100% of this on my taxes? 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. Including additional categories of vulnerable children in the definition of protective services is only relevant for the purposes of CCDF eligibility and does not mean that those children should necessarily be considered to be in official protective service situations for other programs or purposes. OCC has interpreted the stabilization subgrants to be restricted to providers within the tribal lead agencys service area. This applies to regular CCDF, CARES, CRRSA, and the ARP Act supplemental discretionary funds. All Rights Reserved. DCYF Child Care Stabilization Grant As a result of the Federal American Rescue Plan Act, funds are to be used to stabilize, support, and grow the diverse early learning workforce in a way that rebuilds a stronger child care system and expands access to affordable high-quality care. 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, lead agencies may incentivize subgrant recipients to implement certain policies, such as higher pay for staff. As an employee stipend software company that specializes in tax compliance, Compt can serve as your trusted guide to help administer the grant money in the form of an employee stipend, while staying fully compliant with federal tax law. 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. If youre a daycare or child care provider, read on to find all of the important program details. Q: If I pay myself, how much will I owe in taxes? Afterwards it costs $99.00 a year. Please let us know how we can improve this page. The definition of what counts as income for WIC is determined at the federal level, and payments from child care stabilization funding would generally count as income. In order to change their definition of an Indian child, a Tribe would need to submit a CCDF Plan amendment (see Program Instruction CCDF -ACF-PI-2019-03 for more information about submitting CCDF Plan amendments). We will use this information to improve this page. Providers can use the funds to pay prior program expenses incurred after January 31, 2020. 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. These grants are in addition to other pandemic-related relief funds (e.g., CARES grants, Paycheck Protection Program loans, EIDL loans). Yes, the CCDF, CARES Act, and CRRSA Act program funds may be spent on COVID-19 testing kits. Yes, Lead Agencies may pay child care staff based on a childs enrollment rather than attendance. Contact your state to get the answer. The tutoring or academic support services occur within a child care setting as an integral component of the child care services (such as homework help or other learning components that have traditionally been a part of many afterschool or school-age child care programs). 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. 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. Published on Monday, March 22, 2021. The C3 grant funds may be used for wages and benefits for child care program personnel, including compensation for any staff supporting a child care center or family child care providers and their employees. In those circumstances, the ARP funds would not affect an individuals annual income used to calculate the individuals portion of rent. A: You cant use grant money to pay someone who is not treated as your employee. To show payments from the business to the person, documentation may include: Records of self-payments of grant funds from the business should be consistent with personal records for tax purposes. Q: How do I pay myself for the hours I work in the weekends or after work hours? Yes, Lead Agencies may pay full-time subsidy payment rates for school-age child care as long as the Lead Agency is not paying for time when a child is physically attending school and is not paying for any regular education services. Enrollment Capacity Average Enrollment (Before and After Care, Summer Care) 7 Yes. OCFS A: You can include it either on line one (Gross receipts) or line six (Other Income). If you do sign up, please use the referral code 0659. As noted in a prior FAQ, lead agencies have the flexibility to disregard Unemployment Compensation (UC) benefits or Economic Impact Payments (also called stimulus payments) under the CARESVisit disclaimer page, CRRSAVisit disclaimer page, or ARPVisit disclaimer page Acts as income. A: You can pay yourself as often and as much as you want. Yes, Lead Agencies have the option to pay CCDF subsidies for school-age children for time in child care when the children are completing remote, virtual, or online schoolwork. Therefore, while providers may choose to increase pay or offer bonuses for their staff in order to take advantage of these incentives, the provider may not opt-out of continuing to pay their staff at least the same wages. Lead agencies should use the definition they use for obligations for regular CCDF funds when determining whether ARP Act stabilization funds are obligated. Second, if the Lead Agency is unable to re-purpose the funds or does not have policies to allow for this, the Lead Agency can request a waiver of the FY2018 liquidation period due to the COVID-19 for a specified period of time in accordance with 45 CFR 98.19, requests for temporary relief from requirements. Agreements with intermediaries should include requirements 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 to OCC. 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. As a reminder, child care providers must confirm the data used and the estimated current operating costs as part of their applications. If a child care provider intends to cover an individuals family subsidy co-payments, they must use funds other than those from EEC. The application indicates that funds can be used to pay for previous program expenses. Program highlights follow below. Please remove any contact information or personal data from your feedback. Tax Considerations Monthly ReportingGENERAL What is the purpose of the stabilization grants? Lead Agencies should consider whether there are more appropriate sources of fundingsuch as public education dollarsto pay for this equipment. American Rescue Plan Act (ARPA) Child Care Stabilization Grant Opportunity. 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. Therefore, this funding is subject to the same tax rules as regular CCDF funding. State tax rules vary by State. 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. Providers are encouraged to consult with an accountant or tax expert to fully understand the tax implications of this funding. Like regular tribal CCDF funds, tribal ARP Act stabilization funds are set-aside to serve tribal children. Q: If I transferred money to pay myself earlier but sometimes forgot to make a note, can I go back and fix it? 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. A: No! Yes, Child Care Stabilization Grant funds are considered income by the IRS. Yes. CCDF Lead Agencies have the flexibility to decide whether to disregard Unemployment Compensation (UC) benefits under the CARES Act or the CRRSA Act as income or resources when determining CCDF eligibility and family co-payment amounts. Q: My business is an S Corporation. Are there other local resources or options for testing? To the extent that child care workers continue to participate in TANF, SNAP, or Medicaid, child care workers would not lose WIC as a result of receiving child care stabilization funding. Funds are in place so every eligible program can receive one grant per facility/site. 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 Further, providers caring for infants must be aware of, and responsive to, parents who choose to breastfeed while their child is in care (e.g., by making arrangements such as providing space specifically for this purpose). IMPORTANT: Recertifications for C3 funding between the months of July 2021 and June 2022 need to be completed no later than Monday, August 1, 2022 in LEAD. Once an application is reviewed and approved, an email notification of the approval will be sent to the applicant. 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 will I receive the grant awards? These funds are designed to support the child care market as a whole by covering business related expenses. Law 117-2), signed on March 11, 2021, includes $23.97 billion for child care stabilization grants to be allocated to states, territories, and Tribes based on the current Child Care and Development Block Grant (CCDBG) formula. Tribal lead agencies that do not have a child care website must post it on a website associated with the tribe so child care providers know the application is legitimate and from a trusted source. Generally, annual income means all amounts, monetary or not, which go to, or on behalf of the assisted family that are not specifically excluded by HUD regulations (24 CFR 5.609(a)). 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)). Stabilization Help Line: 844-863-9319 Hours: Monday - Friday, 8:30 AM - 4:30 PM 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. ACF has prioritized continuity of care, as demonstrated by the graduated phase-out policy. WV DHHR BFA Division of Early Care and Education is pleased to announce the availability of child care stabilization payments from October 2021 through September 2023 for child care providers that meet . Each state, territory, and tribe may further clarify eligibility requirements, but the federal eligibility parameters indicate that licensed, registered, and legally license-exempt center-based and home-based child care providers are eligible. For example, a Lead Agency could increase income eligibility up to 85% of State Median Income; many Lead Agencies currently have lower thresholds. Self-employed FCC providers should keep separate accounts and records for business and personal finances. However, this guidance may not apply to other allowable uses of these funds, such as increasing provider payments, improving payment policies, increasing wages for providers, waiving or reducing parent copayments rates, increasing income eligibility for direct services, or other allowable uses. Providers receiving stabilization subgrants are not categorized as sub-recipients as defined at 45 CFR 75.2. Do programs need to spend all the grant funding each month? Additionally, FMAP rates are applied quarterly, which means that the original FY 2020 FMAP rates apply to CCDF funds received in Q1, but the enhanced FMAP rates apply to CCDF funds received in Q2, Q3, and Q4. Owe in taxes 45 CFR 75.2 or non-direct services rather than administrative purposes has interpreted the stabilization subgrants are categorized. The IRS rest of your business loans ) e.g., CARES, CRRSA, and CRRSA Act program funds be... 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