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This fillable spreadsheet is specific to NC's Stabilization Grant reporting.

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NC Stabilization Grant Template Expense Reporting

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Priority List for Expending Stabilization Grant Funds Final

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On October 7, 2021, Governor Roy Cooper announced a historic, one-time federal $805 million investment in North Carolina's early care and learning programs. The North Carolina Child Care Stabilization Grants, made possible by funding from the 2021 American Rescue Plan Act, will support working families with access to high-quality, affordable child care. The grants will also help early care and learning programs with recruitment and retention, enabling them to provide better wages and benefits to teachers, and promoting equity for all-children, parents, and teachers.

LATEST NEWS

Don't Lose Your Grant Funds! Submit Updates and Recertification by April 4, 2022.

Child Care Stabilization Grant Recertification and Quarterly Updates will open on Tuesday March 15, 2022 at 9:00 AM. To continue receiving Stabilization Grant funds, every grantee program must submit a Recertification, plus any outstanding Quarterly Updates by April 4, 2022 at 5:00 PM.
Programs that don't submit the required Recertification and Quarterly Updates will not receive grant funds beginning with the April 2022 quarterly payment.
Recertification is the opportunity for a program to change its selections regarding funds for compensation support; programs may opt-in, opt out, or switch options. Quarterly Updates give grantee programs the chance to demonstrate the impact of Stabilization Grants on your program, educators, children and families by documenting how funds have been spent.

Every grantee program is required to submit a Recertification and a Quarterly Update for the first quarter-January, February and March-of 2022. All grantees must also have submitted a Quarterly Update for the fourth quarter-October, November, and December-of 2021. If you haven't submitted the 4th Quarter 2021 Quarterly Update, you must do so before you can continue to the 1st Quarter 2022 Quarterly Update and then on to the Recertification.

Stabilization Grant payments will be discontinued for any program that has not submitted the Recertification plus all applicable Quarterly Updates by April 4, 2022.

Recertification/Quarterly Updates Information Session

WATCH: Stabilization Grants Training 4 - Recertification Information Session
Get the slide deck from Recertification Information Session

No more Monthly Updates!

No monthly update is due in March 2022. To reduce the burden of reporting, the Division of Child Development and Early Education (DCDEE) is suspending the requirement for Monthly Updates to Stabilization Grants.

No reduction in Fixed Costs and Families Grants for 2nd Quarter 2022 payment

The new year brought a new surge in COVID-19 infections due to the Omicron variant. Many North Carolina early care and learning programs have had to manage multiple closures and staff shortages. Back-to-back exclusions have left kids and their families struggling. To support you as the Omicron wave subsides, DCDEE will calculate Fixed Cost and Families grants for the April 2022 payment the same as January 2022 payment. The first planned reduction will come with the July-August 2022 payment. The amount of the reduction will be determined and shared with grantees in April.

RESOURCES

TRAINING

WATCH: Stabilization Grants Training 1 - NC Stabilization Grant Application
Get the slide deck from NC Stabilization Grant Application 2021-2022 (PDF)

WATCH: Stabilization Grants Training 2 - Using Your NC Stabilization Grant
Get the slide deck from Using Your NC Stabilization Grant (PDF)

WATCH: Stabilization Grants Training 3 - Introduction to Quarterly Reporting
Get the slide deck from Introduction to Quarterly Reporting (PDF)

ABOUT CHILD CARE STABILIZATION GRANTS

The North Carolina Department of Health and Human Services Division of Child Development and Early Education administers the North Carolina Child Care Stabilization Grants. Applications are currently being accepted on a rolling basis. Eligible early care and learning programs may apply at any time.

There are two components of North Carolina's Child Care Stabilization Grants. The two components are intended to grant early care and learning programs funds to facilitate high quality early childhood education at its true cost and increase compensation to staff. Each approved program receives a Fixed Costs and Families Grant, based on capacity, subsidized child care enrollment, program quality (star rating), infant/toddler enrollment, and community context (using Social Vulnerability Index).

Approved programs that elect to receive additional funding will also be awarded Compensation Supports Grants. There are two options for Compensation Supports. Programs selecting Option 1 agree to use the additional funding to provide bonuses to all staff. By selecting Option 2, approved early childhood programs agree to increase base pay and/or benefits, implementing a compensation scale that ideally factors in education and length of service as well as job responsibilities.

ELIGIBILITY

Licensed Child Care Programs that are eligible for Stabilization Grant funding must:

Hold a license or be regulated under a notice of compliance by DCDEE on or before March 11, 2021, or

Hold a current license or a notice of compliance and be eligible to participate in the Subsidized Child Care Assistance Program.

ACCEPTABLE USES OF FUNDS

Funds received for Compensation Supports must be spent on personnel costs according to the option for which they were awarded.

Fixed Cost and Families Grant funds can be used for:

Family supports

Personnel costs, including payroll, salaries, similar employee compensation, employee benefits, retirement costs, educational costs, child care costs; and supporting staff expenses in accessing COVID-19 vaccines;

Rent (including under a lease agreement) or payment on any mortgage obligation, utilities, or insurance; also, may include late fees or charges related to late payments;

Facility maintenance or improvements, defined as minor renovations, including outdoor learning spaces/playgrounds, and minor improvements to address COVID-19 concerns;

Personal protective equipment, cleaning and sanitization supplies and services, or training and professional development related to health and safety practices;

Purchases of or updates to equipment and supplies to respond to COVID-19;

Goods and services necessary to maintain or resume child care services;

Mental health supports for children and employees;

Health and safety trainings for staff, including but not limited to CPR, First Aid, and medication administration.

HOW TO APPLY

Be ready to apply, you'll need:

Business NCID#<

Program information, such as enrollment and capacity

Staff education and payroll

Monthly expenses and revenues

Please use the latest versions of Firefox, Chrome or Safari browsers to access the application. Internet Explorer is not supported, and Edge is not recommended.
Child Care Stabilization Grant Data Dashboards
NCDHHS Division of Child Development and Early Education has created two data dashboards to provide Child Care Stabilization Grants summary data. The first dashboard gives insight into the impact of this historic investment, showing the total child care capacity and jobs that are supported by the grants both as a statewide to-date total and by county in an interactive map. The second dashboard illustrates the strength of NCDHHS's commitment to the state's early care and learning network by showing the total stabilization grant dollars paid to-date to child care programs statewide, and a pie chart of grantees by program type. This dashboard also features an interactive map of stabilization grant payment totals by county with several display options: All Payments, Fixed Cost Payments, Compensation Support Payments, [Child Care] Center Payments, [Family Child Care] Home Payments.
GET HELP
To get help with an application or update, or ask questions about Stabilization Grants, please call Stabilization Grants Customer Service Team at (919) 814-6300, Option 2, or email dcdee_support@dhhs.nc.gov.

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On October 7, 2021, Governor Roy Cooper announced a historic, one-time federal $805 million investment in North Carolina's early care and learning programs. The North Carolina Child Care Stabilization Grants, made possible by funding from the 2021 American Rescue Plan Act, will support working families with access to high-quality, affordable child care.

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Stabilization Grants
In response to the COVID-19 public health emergency and its impact on the child care industry, President Biden signed the American Rescue Plan Act of 2021 (ARP Act). The plan includes $24 billion in child care stabilization grant funding for states, territories, and tribes to distribute within their state using the Child Care and Development Grant (CCDBG) formula. The purpose of the child care stabilization grants is to support child care centers and home-based child care providers to stay open or reopen. These grants are in addition to other pandemic-related relief funds (e.g., CARES grants, Paycheck Protection Program loans, EIDL loans). 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. 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. The grants cannot be used for new construction or major renovations.

The following examples are meant to illustrate the different ways in which a family child care provider might utilize the grant and the tax implications of each scenario. However, since every situation is unique and states may release additional requirements or restrictions, providers should always consult a tax professional to obtain advice specific to their own unique situation.
Tax Implications for Family Child Care
In almost every situation, a provider will benefit financially from these grants even after taxes. That said, if a provider is receiving other public benefits based on income eligibility (e.g., health benefits, tax credits, student financial aid) and this grant increases their taxable income to a level that will make them no longer eligible for those benefits, they may need to look very closely at the cost versus the benefit of receiving a stabilization grant.

In a recent webinar hosted by the Office of Child Care Technical Assistance Network, national family child care business expert Tom Copeland provided an overview of the stabilization grants and how family child care homes can handle the tax implications. The tax implications of the grants depend on several factors, namely, how the provider uses the funds, the provider's household income, and possibly the state in which they live. 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).
Example 1: Provider pays herself the full amount
Provider A receives a $3,500[1] grant and uses the entire amount of the grant to pay herself; the full amount of the grant will be taxable, but the provider can spend the funds on whatever she wants (e.g., pay down personal debt, save for an emergency, save for retirement, go on vacation). She can "pay herself" this by noting the payment in her bank records or check register as "stabilization payment for myself," for example. She may keep the funds in the bank account as an emergency fund for later use or she can spend it as she wishes.

For tax purposes, she should reserve a portion of the grant amount to go toward her taxes. A conservative estimate would be to assume 15 percent for social security/Medicare plus 15 percent federal income tax and about 10 percent for state and local income tax, for a total of 40 percent or $1,400. This still leaves $2,100 for the provider to spend as she chooses (or save it). Provider A's 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.
[1]This amount will depend on the state in which the provider lives
Example 2: Provider uses full amount for business expenses
Provider B receives a $3,500 grant and uses it to pay expenses for her business that she would not otherwise pay (e.g., extra employee wages, cleaning supplies, toys). She can deduct these expenses from the taxes she owes, so she will not owe additional taxes if she receives the grant. $3,500 income - $3,500 expenses = $0 taxable income and $0 taxes owed. 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.
Example 3: Provider uses some of the grant to pay herself and some for business expenses
Provider C receives a $3,500 grant and uses the money to pay for equipment that is used for both her business and her family (e.g., computer, television, furniture). The portion that she uses for businesses expenses can be deducted from her taxable income, but the other half cannot, and she will need to pay taxes on that amount. 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.

It is also important for providers to know that not all business expenses are fully tax deductible. 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. 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 this case, she can deduct the business portion of these expenses by estimating the percent of time they will be used for business versus personal purposes (usually her time-space percentage).

Where to find more information
Help is on the way! Supporting Family Child Care to Prepare for Child Care Stabilization Grants
Help is on the way! Supporting Centers in Preparing for Child Care Stabilization Grants
Tom Copeland's Blog: Taking Care of Business
Find Stabilization Grant Applications for your State or Territory

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What are the Tax Considerations of the American Rescue Plan Act (ARPA) Child Care Stabilization Grants for Home-based Child Care Providers?

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Stabilization Grants In response to the COVID-19 public health emergency and its impact on the child care industry, President Biden signed the American Rescue Plan Act of 2021 (ARP Act). The plan includes $24 billion in child care stabilization grant funding for states, territories, and tribes to distribute within their state using the Child Care and Development Grant (CCDBG) formula.

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How to Find, Choose and Work with a Tax Professional - Tom Copeland’s Taking Care of Business

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Family child care providers should pick a tax professional who understands the unique tax rules of your business.

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How to Find a Tax Preparer - Tom Copeland’s Taking Care of Business

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Here are tips on how a family child care provider can find a tax preparer who understands the unique tax rules for their business.

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Thank you SWCDC for creating this editable flyer for TA distribution!

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NC ECE Shared Resources | Marketing Home

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