This may include additional eligibility criteria (that apply only at redetermination) or adjusting the graduated phase-out levels to help the lead agency manage the population served and ensure that those most in need are receiving services. However, Lead Agencies may apply for temporary waivers for extraordinary circumstances in response to emergency situations in accordance with 45 CFR 98.19. Thank you for your website feedback! Lead Agencies may also use CCDF quality dollars to provide temporary grants or assistance to impacted providers to retain the child care supply during periods of closures. Note that child care providers that are receiving stabilization subgrants from a tribal lead agency should be serving at least one Indian child, as defined by the tribal CCDF Plan. Recipients of the C3 grants are not required to spend funds within the same month they are received. When do programs need to recertify their application? If child care workers were to lose access to TANF as a result of the stabilization funding, this would be counter to the goals of that funding. Yes, every licensed child care program site is eligible for a grant; this includes multi-site programs. 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. Is our grant amount $15k or $24-$52k? Are the C3 Child Care Stabilization grants taxable? You should amend your 2020 taxes and report it as income and pay taxes on the amended return. Child care programs may not furlough any employees while receiving the C3 grant funds. 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. Provider As household income is low enough; she may only owe the 15 percent in social security and Medicare expenses and can keep $2,975 for any use. OCC suggests the lead agency document the use of funds, including a written demonstration that the use of funds for incentives is directly connected to a CCDF authorized activity, and that the costs are reasonable and "ordinary and necessary" to accomplish CCDF objectives. We remind Lead Agencies to develop emergency preparedness plans that contain guidelines for continuation of child care subsidies and child care services, which may include the provision of emergency and temporary child care services during a disaster, and temporary operating standards for child care after a disaster. Find Stabilization Grant Applications for your State or Territory. In addition, lead agencies can and are expected to use some of their ARP Act stabilization set-aside to help child care providers access and apply for assistance, free of charge to the provider. Note: Applications for the Child Care Stabilization Grant Program were due by 11:59 PM on March 30, 2022. The Families First Coronavirus Response Act (Families First; P.L. Child Care Relief Funds. Well answer: One of the most common questions about this federal relief program is how much is the grant? Lead Agencies are permitted to use funds for the establishment and maintenance of computerized child care information systems, including data systems. This program doesnt just impact parents and childcare providers either. We do note that families of essential workers would continue to be eligible for the full minimum 12-month eligibility period if the households income fell below 85 percent of SMI. 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. 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. This page is located more than 3 levels deep within a topic. Adhering to your states unique spending and reporting requirements for funds that are part of the grant through the Office of Child Care. 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. The CCSG application is now closed. While tribes have some flexibility in defining "Indian child," the definition must be limited to children from federally recognized Indian tribes, consistent with the CCDBG Act's definition of Indian tribe (45 CFR 98.2Visit disclaimer page). Can I put it on my 2021 tax return? How should a program manage/account for having multiple streams of funding from EEC and other state agencies? Lead Agencies have fiduciary responsibility to protect the integrity of the CCDF program funds. 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). You will owe 15.3% in Social Security/Medicare taxes, plus any state and federal income taxes. To paint a picture, child care centers today are facing decreasing revenues due to lower enrollment, higher expenses to operate safely during the pandemic, and severe and ongoing staffing difficulties. Stipulations for what the funds can be spent on and how to properly report them. Can this include replacing lost income due to low enrollment? 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 business gross income. ACF strongly recommends that CCDF lead agencies coordinate with the state agency that administers TANF to ensure that child care workers do not lose or experience reductions in their TANF benefits when receiving assistance from the ARP Act child care stabilization funds. Paycheck Protection. 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. Q: Does it matter how much income I made this year to use the Stabilization grant to pay myself? The IRS has published information indicating that "receipt of a government grant by a business is generally not excluded from the business's gross income under the Federal Tax Code and therefore is taxable." 1099 forms were mailed to programs detailing the amount of C3 funding the program received in 2021. 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. No, lead agencies cannot use ARP Act stabilization funds for direct child care services. To access your existing Child Care Stabilization Grant application, please go to childcare-grants.ocfs.ny.gov. Lead agencies are encouraged to use ARP Act supplemental funds, as well as CRRSAVisit disclaimer page and CARES Act funds, to provide relief from copayments for CCDF-eligible families and cover the portion of the child care cost ordinarily covered by copays. We encourage Lead Agencies to take steps to assure that the hazard pay reaches staff actually providing care for those providers. Even if I didnt get Form 1099? Going forward, child care providers should continue to consider CDC guidance and follow lead agency requirements related to COVID-19, and be prepared to update processes if and when states, territories, and tribes resume pre-COVID policies for parental access to children. It would be OCCs expectation that Lead Agencies would employ this flexibility only on a temporary basis for the period of the public health emergency related to COVID-19. 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. Lead agencies may choose to contract with intermediaries, such as counties, child care resource and referral agencies, and staffed family child care networks, to manage the administration of the ARP Act stabilization subgrants. The amount you pay yourself has nothing to do with how many hours you work or when you work. Therefore, providers participating in their ARP Act stabilization subgrant programs may terminate an employee for cause during the subgrant period. Access to safe and reliable child care is the backbone of our economy and essential for employees to get back to work. Q: Are the Stabilization grant requirements the same from state to state as to what I can use the money for? 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. 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. 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. Can I reallocate some of this money so I dont have to pay income taxes? Q: Is it better to pay myself with this grant or spend it on items for my business? OCC would presume any decreases in spending on child care services for eligible individuals below the amount that would have been spent under tribal law and policies in place of the date of enactment of the ARP Act (March 11, 2021) to be supplantation. The grants cannot be used for new construction or major renovations. Furthermore, given finite CCDF funding to meet child care needs, the federal Office of Child Care encourages Lead Agencies to set parameters that restrict the use of CCDF for child care services during times when schools are open and children are able to attend safely in person. Tribes are limited to serving CCDF children within their service area. The responsibilities for document retention are the same regardless of whether you are selected for review. Some states have decided to be very lenient in how they distribute funds, some have a rigid set of regulations, and some have yet to decide how theyll give out these funds. Q: If I use the grant money to pay myself and then use the money to repair my home or fix my basement, can I deduct this as a business expense? The purchase of such equipment may be more appropriate in circumstances where the child care provider will use it for additional technology-based learning or recreational activities in the child care program beyond virtual school instruction. Consult an accountant or tax professional to understand more about the programs particular tax situation and how this guidance applies. CCDF requirements include completion of CCDF health and safety training requirements, completion of comprehensive background checks, and other lead agency-specific requirements, such as participating in a quality rating and improvement system. However, adding plexi-glass barriers to an existing entry way or entrance would likely be allowable. Then put aside some money in a place that is low risk (bank savings account, short-term bond fund or money market account). Emergency Responseincludes FAQs about temporary, short-term measures and existing flexibilities available to Lead Agencies under CCDF that may be taken during the current public health emergency in response to COVID-19. You will probably owe no more than 40% of the grant in taxes. 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? The ARP Act child care stabilization funds are specifically designed to promote the stability of the child care sector. The definition of what counts as income for federal housing assistance is defined by section 3 of the U.S. Housing Act of 1937 and HUDs implementing regulation at 24 CFR 5.609. The child cannot receive academic credit towards graduation solely for participating in the tutoring or academic support itself, pursuant to 42 USC 9858k(b)(2) and 45 CFR 98.56(c)(2). No, a budget is not required as part of the application. Return to Top Application Process To learn more about how to apply, please view our Application Guide or Application Walk Through Video on our website available in English, Spanish, and Vietnamese. A: Maybe, depending on how much of the grant you dont spend on business items. In each monthly submission, you will complete two sections: NOTICE: All CCSG providers must now use the NEW monthly reportlaunched beginning with the grant award for September 2022. Section 658M(b) of the Child Care and Development Block Grant (CCDBG) Act, 42 U.S.C. OCC encourages child care providers to provide relief from tuition and copayments, if financially possible, especially for low-income families. Example 1: Provider pays herself the full amount. It affects how we all work, when we can work and for many, why we work. The Expenditure Tracker can be found on the EEC website under the Resources section: Commonwealth Cares for Children / Child Care Stabilization Grants | Mass.gov. By using our website you consent to the use of cookies, two-thirds of childcare centers are serving less than 75 children and are struggling to break even, American Rescue Plan Act (ARPA) Child Care Stabilization Grant requirements by state. 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). 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. 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. Therefore, the lead agency cannot require child care providers receiving stabilization funds to use the funds to cover the cost of reduced family payments. The recertification process can be done at any time after the first of the month. 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). Umbrella organizations must submit individual applications for each individual site they manage, but they may not submit a single application that covers all managed sites. In contrast, the child care sector provides non-parental care and early education for children. Per Federal requirements outlined in The American Rescue Plan (ARP) Act of 2021 (Public Law 117-2), certify that they will meet the following requirements throughout the period of their grants: The provider will, when open and providing services, implement health and safety policies in line with guidance and orders from corresponding state, territorial, tribal, and local authorities and, to the greatest extent possible, implement policies in line with guidance from the Centers for Disease Control and Prevention (CDC). General Grant Questions Q1. 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). It is a tool to assist child care providers in tracking expenditures made with C3 grant funds. 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 Department of Children and Families (DCF) has allocated $351 million in funds for the Child Care Counts: Stabilization Payment Program to support Wisconsin's early care and education community. Lead Agencies may submit a waiver to ACF to reduce the eligibility period for essential workers. Q: If I pay myself, how much will I owe in taxes? The required W-9 information is included in the application, so providers do not need to download or upload a separate form. Learn about provider eligibility for the COVID-19 vaccination. 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. Likewise, lead agencies have the flexibility to disregard payments made to youth in, or formerly in, foster care through the Chafee Program for Successful Transition to Adulthood as income. Providers who received an initial disbursement will receive email notifications via NJCCIS when they are eligible to recertify, this process will begin in December 2022. 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. Programs should contact an accountant or tax professional to understand more about their particular tax situation and how this guidance applies to their specific business. In other words, lets say you paid yourself $5,000 and used $2,000 for items used 100% for your business. 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. U.S. Department of Health & Human Services, Emergency Preparedness, Response, and Recovery Resources, National Resources about Family Child Care, ARP Act CCDF Discretionary Supplemental Funds, Early Childhood Systems Building Resource Guide, State and Territory Administrators Meeting Resources, Preschool Development Grants Birth through Five, Tribal Child Care Capacity Building Center, Early Childhood Development, Teaching and Learning, Early Childhood Learning and Knowledge Center (ECLKC), White House American Rescue Plan Funding Fact Sheet, Early Childhood Leaning & Knowledge Center (ECLKC), Tribal, State, and Territory Administrators Meeting Resources. If a child care provider intends to cover an individuals family subsidy co-payments, they must use funds other than those from EEC. As a reminder, child care providers must certify that they will pay at least the same wages and benefits to staff for the duration of the subgrant. Enrollment Capacity Average Enrollment (Before and After Care, Summer Care) 7 Yes. Additionally, the ARP Act gave states significant discretion in determining how the child care stabilization grants would be apportioned to child care providers, and self-employment income and exclusion determinations may vary by options selected by the state. ACF has prioritized continuity of care, as demonstrated by the graduated phase-out policy. (45 CFR 75.2Visit disclaimer page). State tax rules apply. Q: Does the federal guidance for this grant require providers to gift any of it to parents? 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 Lead agencies have the flexibility to determine the documentation a child care provider must submit to confirm their current operating expenses and are encouraged to accept a variety of types of documentation and limit burden on applicants. Forthcoming guidance will comprehensively address use of the CCDBG Supplemental funds in the American Rescue Plan Act. Sometimes ARP Act child care stabilization funds are received by child care workers receiving federal housing assistance in such a way that they may be regarded as temporary, nonrecurring, or sporadic payments. The $3.5 billion in supplemental CCDF CARES Act funding is subject to the same tax rules as regular CCDF funding. 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