In mid-April, FCCAM reminded providers of the need to have completed their 2 Evacuation Drills by the end of May. This reminder on our Facebook page generated a number of questions. We reached out to Licensing to see if we could get some additional answers. The initial response we shared has been further updated.
Here’s the first response: ANY type of emergency disaster drill counts…some options that could be practiced: shelter in place, lost child, simulated relocation (staff, NOT KIDS TRANSPORTED unsafely in cars), severe weather, unknown person/suspicious situation, coming inside due to an emergency, etc.
Here’s the update: (4/22/22) The language of the Licensing Rule specifies a requirement for 2 evacuation drills in rule SECTION 14. ENVIRONMENT AND SAFETY /Q. Emergency preparedness plan / 2. The Provider must conduct an evacuation drill at least twice a year and the dates must be recorded and be available for review. (Same section for Facility Rule. Q/2 language: The Child Care Facility must conduct an evacuation drill at least twice a year and the dates must be recorded and be available for review. A simulated drill is acceptable.)
Shelter-in-place drills of any kind that do no include evacuation, do not meet the emergency drill needed for rule compliance.
Why the need for completion by end of May? The Family Child Care Licensing Rule went active on May 27, 2021. That meant fcc providers were expected to be in compliance with the Rule as of that date. For all providers that were licensed when it went active, the FCC Licensing Rule will have been in place for 1 year come May 27, 2022.
Let’s look at this more:
You already do monthly fire drills with the smoke alarm.
You already have a running log for fire drills.
You need to add 2 noted Evacuation drills to that log.
Reminder: FCC Rule Section 5/A-5: A record of fire drills for the preceding three years must be available for inspection by the Department of Health and Human Services, the Department of Public Safety, State Fire Marshal’s Office, and local fire inspectors.
The key word is evacuation
Simulate it: practice the steps to gather and leave. Use the language specific to evacuation vs fire.
As part of your Emergency Preparedness Plan you should have multiple alternate sites you could evacuate to. It is recommended to have one you can walk to. For a walking site you could actually gather and leave your premises.
You are not required to transport children off the premises. If you do transport children as part of your program, you can practice transporting as part of your drill. If you do not transport, you can practice what loading everyone into a vehicle would be like in an emergency. Simulating this does not put any child in harms way as your vehicle is not running at any point. You just practice loading in, sitting still, and unloading. You could then pretend you are at the safe site and what would you do there?
As for fire drills, you should use different exits.
You can also practice any of the other types of safety drills you think would support the children, such as shelter-in-place, reverse evacuation, medical emergency and lost child. Log any Safety Drill you practice.
There continues to be questions about the “Staff Handbook” required in the current Family Child Care Licensing Rule. The Professional Learning Committee has a variety of resources around staff available on this site. They can be found through the “Menu” under “Business Toolkit ” and “Licensing Rule (FCC)”.
Let’s start with the “Staff” part of the 3 checklists found in the “Licensing Rule (FCC)”. This list is the minimum required in the FCC Licensing Rule. For sole providers this can all be covered in your general Parent Handbook. You do not need a separate staff handbook that way. The purpose of the Staff Handbook is to be sure responsibilities are clearly stated for staff. The Staff Handbook does not need to be shared with your parents. For these with Staff you may also find you have this covered in your Parent Handbook. If so, copy it for your separate Staff Handbook.
Policies and implementation required:
i. Mandated reporting,
ii. Child guidance,
iii. Child illness,
iv. Fire drill procedures,
v. Emergency and disaster procedures,
vi. Staff Member qualifications and training,
vii. Supervision of Staff Members/interns
viii. Reporting licensing violations,
ix. Inclusionary practices for Children with disabilities,
x. Safe sleep policy,
xi. Serious injury and Child death reporting,
xii. Expulsion and suspension prevention,
xiii. Interpretation for English Language Learners,
xiv. Release of Children, and
xv. Transportation of Children (if applicable).
A personnel record must be kept for all Staff Members.
a. Name, current street and mailing address, birth date and current telephone number;
c. Dates of employment and termination of Staff Members. Reasons for termination must be kept in the personnel record for a minimum of one year;
d. A statement signed and dated by each Staff Member certifying that the most current licensing rule has been read and understood;
e. A statement signed and dated by each Staff Member, certifying that the Provider ‘s personnel policies, admission policies, and Parent handbook have been read and understood;
f. Documentation of any disciplinary action;
g.Documentation of completed background checks in the form of a Provider Letter of Eligibility, issued by the Department, that specifies the Staff Member is Eligible for employment.
The Provider must document all orientation and training of all Staff Members by proof of completion from a qualified on-line or in-person source.
Staff Members must be properly immunized and provide documentation of immunizations to the Provider.
Staff members must receive written instructions regarding Child Abuse or Neglect reporting that contains a summary of the State of Maine Child abuse reporting statute and a statement that they will not be discharged or disciplined solely because they have made a Child Abuse or Neglect report.
Immunization records must be maintained to ensure proper medical treatment is determined and given in the event of a disease outbreak or public health emergency.
On this website, the “Business Toolkit” is where you will find most of the resources you want for both parent and staff agreements. For parents go to the landing page to start. For staff go directly to the drop down menu.
The “Staff Contract/Handbook” contains just about everything a small family child care owner needs to support hiring, staff meetings, contractual language and complying with the FCC Licensing Rule for a Staff Handbook around program policies. Language samples runs from a simple 1 page policy awareness and signature to sections that cover everything in more detail. As each program is unique, you will have to do some clicking and scanning of the shared resources the PLC has gathered from a variety of providers to find what works best for you. Adjust to meet your specific needs.
What to do about COVID-19 continues to be an area of discussions among providers. The most recent is about whether to follow the new CDC guidance on COVID-19 or continue with the current practices. First, a reminder that CDC recommendations do not supersede state, local, tribal, or territorial laws, rules, and regulations. As long as providers comply with state and local regulations, as small business owners, we are able to make the decision that works for our individual situation/program.
Whatever you decide works for you, please remember to have it as part of your written policies. With any change to policy, it is best practice to have parents sign off on being informed of the change. This is easy to do with a simple 1 page signature sheet you keep with your records.
Both the past guidance and new recommendations will continue to be available on the website. You can find them in the Menu under “Current Covid Info”.
Here’s what we’ve pulled from the CDC site as of 12/27/21:
CDC is shortening the recommended time for isolation, if asymptomatic, from 10 days for people with COVID-19 to 5 days. Isolation is to be followed by 5 days of wearing a mask when around others, to minimize the risk of infecting others.
The ongoing scientific studying of COVID-19 and the current Omicron variant, is demonstrating that the majority of SARS-CoV-2 transmission occurs early in the course of illness. This is generally in the 1-2 days prior to onset of symptoms and the 2-3 days after. The change in isolation recommendation reflects this.
The CDC also updated the recommended quarantine period for those exposed to COVID-19.
For people who are unvaccinated or are more than six months out from their second mRNA dose (or more than 2 months after the J&J vaccine) and not yet boosted, CDC now recommends quarantine for 5 days followed by strict mask use for an additional 5 days.
If a 5-day quarantine is not feasible, it is imperative that an exposed person wear a well-fitting mask at all times when around others for 10 days after exposure.
Individuals who have received their booster shot do not need to quarantine following an exposure, but should wear a mask for 10 days after the exposure.
For all those exposed, best practice would also include a test for SARS-CoV-2 at day 5 after exposure.
If symptoms occur, individuals should immediately quarantine until a negative test confirms symptoms are not attributable to COVID-19.
CDC Director, Dr. Rochelle Walensky:“The Omicron variant is spreading quickly and has the potential to impact all facets of our society. CDC’s updated recommendations for isolation and quarantine balance what we know about the spread of the virus and the protection provided by vaccination and booster doses. These updates ensure people can safely continue their daily lives. Prevention is our best option: get vaccinated, get boosted, wear a mask in public indoor settings in areas of substantial and high community transmission, and take a test before you gather.”
Data from South Africa and the United Kingdom demonstrate that vaccine effectiveness against infection for two doses of an mRNA vaccine is approximately 35%. A COVID-19 vaccine booster dose restores vaccine effectiveness against infection to 75%.
COVID-19 vaccination decreases the risk of severe disease, hospitalization, and death from COVID-19.
CDC strongly encourages COVID-19 vaccination for everyone 5 and older and boosters for everyone 16 and older.
UPDATE (12/22/21): APPLICATION is now available! Submit application by January 14, 2022. Those selected will be notified by January 22, 2022.
FCCAM has encouraged providers to be looking for and opening the weekly “Shortcuts” email that comes from MRTQ PDN. It’s a longer email, but easy to scan through. It shares tons of information about training opportunities all in one place. We are sharing information from the 12/15/21 “Shortcuts” just in case you missed it.
MRTQ PDN is offering a pilot of the Strengthening Business Practices for Child Care Programs Initiative.
This unique professional development opportunity includes a virtual training series with an additional two meetings in the form of a Community of Practice, specifically for those participating in the pilot. These COPs will focus on business practices allowing time for peer-to-peer support, sharing of knowledge, and problem-solving.
Additionally, upon successful completion of this pilot program, participants will be offered on-site consultation and will receive a Quality Improvement Award of computer hardware and/or software.
This free training is open to family and center-based child care as well as to out-of-school time programs.
The goal of the training is to strengthen program leaders’ foundational knowledge of fiscal terms, concepts, and practices.
The four modules on this virtual training will focus on:
Developing a budget and using it for decision-making throughout the year,
Understanding how to project business costs, generate additional income, and plan strategically for future goals,
Using fiscal reports and understanding internal controls to strengthen your program’s fiscal health,
Using data and articulating features and benefits of your program for marketing purposes
Understanding best practices for hiring and training staff and becoming familiar with developing a staff handbook and strategies for staff feedback.
Virtual sessions will be held 6:30 to 8:30 pm on:
Feb ’22: 2nd & 16th
March ’22: 2nd, 16th & 30th
April ’22: 13th & 27th
May ’22: 11th
Community of Practice meetings to be held in March and May are TBA for evening or Saturday morning.
As self-employed small business owners, family child care providers today have 2 options for health care coverage: insure under a partner’s employer-sponsored coverage or purchase our own through an Affordable Care Act Health Care Marketplace. In the past, many providers found ACA coverage while an option, still expensive and/or had high deductibles. If we have employees we are not usually in a place to provide them with health insurance and they face the same options: self coverage or partner’s. It’s important to know that with changes to the law, the Affordable Care Act Health Care Marketplace has become more affordable.
Maine now has their own Health Insurance Marketplace: CoverME.gov. Providers and their staff should check out their options before enrollment ends. It’s pretty easy. Create an account, fill out an application, and enroll in quality, affordable coverage.
Some Things to Know about the Marketplace Open Enrollment:
Open Enrollment Period started on November 1 and runs until January 15, 2022.
Consumers who enroll by December 15 can get coverage that starts January 1, 2022.
The American Rescue Plan has provided increased financial assistance to lower premiums and out-of-pocket costs, making coverage more affordable.
Health plans are available that offer doctor visits, emergency care, behavioral health care, preventive care , hospital care, and prescription drugs.
There is more help available. To shop and compare health plans use Maine’s Plan Compare tool. It will take you through a few simple steps to find the right health insurance plan for your needs and budget.
*Sample of what might see as a plan from the Plan Compare tool for a single individual 57 years of age with income at $45000.There were 49 plan options.
CoverME.gov is operated by the Maine Department of Health and Human Services P.O. BOX 616 | AUGUSTA, ME 04332-6626 | 1-866-636-0355 | TTY: 711
All child care providers, whether they are licensed-exempt, FCC providers, center directors or any child care staff are required under the active Licensing Rules for FCC and Facilities to join the state’s Registry that MRTQ PDN handles. Part of being on the registry means you will receive “SHORTScuts” a weekly e-newsletter. It usually hits inboxes on Wednesdays.
Why should you care if it’s in your spam box or not?
Most of us get too many emails to deal with as busy providers. With our limited time to do required and recommended record keeping, when checking emails it’s just so easy to trash ones we see as unimportant to our daily work. And the ones already in the spam box are really easy to ignore. You want to check out SHORTScuts before you trash it. Yes, it’s a longer email, but you can quickly scroll through it only stopping at items of interest.
The weekly SHORTScuts is the best place to see what is happening in the wider ece field for trainings. MRTQ PDN has the ability to gather resources on training opportunities that no other organization or agency in Maine does. With SHORTScuts they have pulled together news about local, state and national training opportunities. If you see a training opportunity of interest you can easily access more information from the link buttons included in the descriptions. They also share informational updates, usually at the beginning of the e-newsletter.
Still don’t think you’ll have time to deal with checking your email for this weekly e-newsletter? That’s ok. MRTQ PDN has the publications from March 2020 to the latest SHORTScut e-newsletter on their website. You can always just go there.
The weekly SHORTScuts e-newsletter comes from: firstname.lastname@example.org. Be sure to adjust your email’s recognition of this, so the email doesn’t sit in your spam box.
FCCAM Professional Learning Committee reached out on the ARPA Stabilization Grant to see if we could get a couple of questions being raised by providers answered.
Our email: “The PLC has received questions about how providers will receive payment and when it will start. We have previously posted for providers to watch for regular mail containing information they would need to the grant application and the email that their application submission was received. We have been reminding providers to retain all communications around this ARPA Grant. We are wondering if you have future directive we can provide regarding email notification, regular mail payments, etc. Any informed information we can share with providers would be appreciated.”
The response: “If they are set up for direct deposit they will receive payment that way, if not they will receive a check in the mail. Payments will start at the end of October. We will be updating info /FAQs/ etc within the next few weeks.”
Providers are also asking about the amount stated on their email about approval of their grant application. This is not the first email that states your application submission went through ~
It’s the email saying after review your application is approved. This approval email will list the amount of your grant. This amount is the monthly amount, not the total amount of grant. Your total amount will depend on when you apply for the grant and are approved. If you got in before Sept. 30th, your first payment will be coming the end of Oct. ’21. If you continue to provide direct care you will get monthly payments of the grant through Sept. ’22. This ARPA Stabilization grant is to run from Oct. ’21 to Sept. ’22, a maximum of 12 months. With this being a rolling grant providers who did not apply before Sept. 30th will be able to apply going forward.
Also note that your business situation might change over the length of the grant. You will be able to update your application through self-reporting. Details on this will be coming.
Some providers have asked about the listing of dollar amounts for each of the QRIS Steps. This indicates what the increase you would see each month would be if you raise your QRIS Step level. The amount is a monthly amount, not per child. With the incentives available from MRTQ PDN for moving up Steps, providers might find this a good time to look at what is needed to move up QRIS Steps. FCCAM PLC is happy to help any of our members looking at this. MRTQ PDN also has free Technical Assistance(TA).
Is award based on capacity? No the monthly amount is based of the number you are licensed for. In our discussions the PLC figures the questions around capacity are there to gather data about what is happening in Maine around care availability. Are workforce shortages impacting this? Is Maine’s workforce getting back to normal? Are there child care deserts, where future funds need to be focused? Etc. Federal money has requirements attached to it.
Estimation of your expenses falls into the same place. Why is this asked? What if I don’t have a lot of expenses? How do I use up the money? Etc. Don’t worry about the amount of the estimated expenses, just be sure you track what you spend the grant money on. A previous posted resource about allowable expenses is a place to start.
We also want to remind providers that you need to:
This is a perfect time to look further at how you maintain your small business records. Record keeping is recognized as one of the best returns in increasing your income for time spent. It will be especially important to have a solid tracking system in place to track the ARPA Stabilization grant funds vs expenses.
FCCAM will continue to share updates on the grant through blog posts, on our Facebook page and under the “Stabilization Grant” menu tab. You can find additional resources under the “Stabilization Grant” menu tab.
This is an informational post from FCCAM PLC. The PLC cannot provide you with specific information about your application. For questions about status or updates to your ARPA Stabilization Grant application contact: ARPAChildCareGrants.DHHS@Maine.gov.
The ARPA Stabilization Grant which will provide monthly payments beginning in October 2021 through September 2022 to all eligible child care programs has it’s first deadline approaching. To receive an Oct. payment a provider/program must complete and submit their grant application by 5:00PM Thursday, September 30, 2021.
As providers ourselves we know how this seems to be just one more thing to juggle at this time and we already have enough on our plates. That said, the monetary return on the time spent to apply is pretty significant.
Programs only need to apply once.You will be able to update program information if needed at any time after applying.
Our understanding is that as of Monday, Sept. 27, 2021 only 58% of eligible programs have submitted grant applications. FCCAM continues to strongly encourage all eligible programs to apply for this grant. Yes, it’s income and you will be paying some additional taxes, but you will still walk away with an increase to your income. You have a good number of options on usage of these funds, such as: temporarily lowering parent fees, increasing staff wages or benefits, cost for mental health support or even debts caused by COVID.
All licensed child care providers and licensed exempt Child Care Subsidy Program (CCSP) nonrelative providers that are open and providing direct child care are eligible to apply for the ARPA Stabilization Grant.
This grant is providing a rolling application so eligible programs will be able to apply after Sept. 30th. Applying after Sept. 30th means you will forfeit the monthly installment payments that occurred prior to your application being accepted. (Example: applying in Nov. means first payment eligible for would be Dec. You missed out on Oct. and Nov. payments)
Eligibility is based on the following factors: • Providers must be open and providing direct child care on a regular basis at time of the application. • Programs must be in compliance with licensing rules. • Programs must have a valid Vendor Code with OCFS. If you do not have one you can get one through OCFS. If you received one or more of these payment types: OCFS CARES Act or CRRSA Grant funding and/or Child Care Subsidy Program reimbursement, you have a vendor code.
Here are the requirements that we’ve hear has caused some concern/frustration for providers: • All program staff must be active members in the Maine Roads to Quality. If you haven’t registered yet it only takes about 15 minutes and the current Licensing Rule requires joining. You do not need to have all your work experiences or trainings added at this time, just open up your registry account. This FCCAM post can walk you through it. • Licensed programs must be active in the Quality for ME Quality Rating Improvement System (QRIS). This is also a current Licensing Rule requirement for programs. It also takes less than 30 minutes. You do not need to go for your highest level just now, just get on QRIS. This FCCAM post can walk you through it. • All owners, directors, and staff must have completed the State approved health and safety training within 90 days of hire. Here’s more info on that. This training is pretty easy to break up into short parts, so can complete it even with the busy schedule of providers and staff. • Providers must supply on the application their program’s estimated current total monthly expenses. The key words here are estimated current monthly expenses. This is with time/share % figured in. List what you spend each month and what your income is. This info isn’t used to figure what your monthly payment will be, but can be thought of as data the state needs as part of administering the grant.
We hope you all apply for the ARPA grant!
Need more encouragement? Compare this scenario with your situation. Family child care providers also remember that you are STAFF for this grant.
Sole provider / licensed for 6 / subsidy / Quality for ME Step 3
Step 3: $150
Monthly total: $1100
Payments start in Oct. 2021 and end Sept. 2022
Oct/Nov/Dec 2021: $3300
Jan thru Sept 2022: $9900
30% tax on this scenario’s extra income means you would still pocket about: $2300 for 2021 & $6900 for 2022
The Professional Learning Committee continues to review the FCC and Facility Licensing Rules as part of gathering resources to support providers. As part of this review we hit upon the requirement in the staff handbook that requires interpretation for English Language Learners.
This is not an area we have seen providers raising many questions about, but are also not seeing it addressed in policies we are seeing. We are wondering if providers have not picked up on it, as we had not in our previous readings of the Licensing Rule?
The diversity of Maine’s communities, whether urban or rural, continues to grow. This diversity is also being seen in the child care workforce, whether it’s staff or new programs being opened. With community changes providers are seeing the diversity of the children in care changing. The question becomes how we as small business owners address this diversity within our programs. Providing the service of child care we know that working with the child’s family is a major part of that we do. We want our client families to understand we are open to working together. Add in that best business practice tells us we should address our working practices within our policies. The PLC reached out to MRTQ PDN DC Marnie Morneault to discuss concerns of English Language Learners and some of the impact on providers and programs. As part of this discussion Licensing was also asked to clarify if the interpretation requirement was just for staff, as that was the only place we found it clearly required. Their response was that interpretation covered more than staff. It covered our work with children and communication with their parents/legal guardians. With this clarity the PLC felt it was important to provide sample language providers could use in their handbook covering interpretation.
The question became: “How do we make it clear that we welcome diversity and meet interpretation needs for English Language Learners (ELLs)?”
You might also see or be familiar with ELLs being referred to as: limited English proficient (LEP), Dual Language Learners (DLLs), home language, or primary language. In the past English as Second Language (ESL) was commonly used. That has changed with the recognition that many who are learning English already speak several other languages, so English would not be a “second” language.
What is language interpreting and translation?
Language interpreting is the conversion of one spoken language into another, where translation covers written language. Interpreting and translation also apply to the context of signed languages and tactile writing systems like Braille.
Looking beyond the child considering a child’s parents and/or your staff, they may have good conversational fluency in English, but may not be able to understand, discuss or read information proficiently in English. They may be reluctant to request or accept professional interpreting and translation services due to fear of costs, inconvenience, or concerns about confidentiality. We felt these barriers needed to be consider in development of policy language. Providers may already be addressing inclusion within a number of policies around children’s rights, parental communications, their program’s curriculum meeting individual child needs. Through continuing discussion specifically around language, the PLC thought it made sense for providers to add in simple, specific language that clearly mentioned working with English Language Learners. Working with Marnie we have 2 language versions that should meet that need.
If you have your handbook all updated for the new Licensing Rule, you can add this language as an addendum. If you print off your handbook you can now print off this language as a separate sheet and hand it out to parents. If you do your handbook online, it’s easier to make changes in the set-up. Make the change and then send an email with the link, verbally tell and/or note on your parent information board.
English Language Learners Policy (Families):
At ___ childcare we accept learners from all ethnic backgrounds. The primary language we communicate in is ____. If you communicate more comfortably in another language, please let us know. We will make every effort to make our materials and communications accessible for you in your home language. We will also incorporate your child’s language and culture into our visuals and communications as much as possible.
English Language Learners Policy (Staff):
At ____childcare we employ staff from all ethnic backgrounds. The primary language we communicate in is ______. If you communicate more comfortably in another language, please let us know. We will make every effort to make our materials and communications accessible for you in your home language.
Additional resources for providers looking for more information on this topic:
Conversations questioning whether or not providers should apply for the lastest stabilization grant are going on. Members of the PLC have done research of federal/national resources, and reviewed other states’ approaches. FCCAM PLC is not offering any financial or legal expertise with this post. While FCCAM supports providers applying for this latest stabilization grant, it is up to each provider to make the best decision for their personal position and their small business’ sustainability.
Grants and loans are income for tax purposes, but unlike a loan you do not have to pay a grant back. A comment repeatedly heard in discussions has been in regards to providers not wanting to pay additional taxes. If you take this grant you would be paying additional taxes on the income from the grant, but at the same time you would be walking away with more money than you had without the grant.
A common figure used for estimating what the extra tax basis would be is 30% – 40%. As self-employed, you have to pay 15% Social Security/Medicare tax; any state tax; and then the federal tax (following the current year tax brackets) on all income, including any grant money. If you are looking for an estimate of what to take off the top, look at 30-40% tax on the grant money.
Thinking of the grant as extra income, not extra taxes, here’s an example:
Provider licensed for 8, needing their full-time equivalent (FTE) to be at 5 to meet their annual business budget.
“Full-time equivalent(FTE)” is a financial term. For child care it means filling up a care slot. It’s not licensed capacity. It’s how your care slots are filled. We all know we are licensed for a certain number, but we often have more than that enrolled in the program. That’s because if we are doing part-time or before-after school care we are juggling children to fill each care slot as full as possible so we are maxing out the potential income.
Do you turn away children when full-time equivalent is reached? For most the answer would be “No”. Extra income is made from those additional children in care, even minus the 30% paid in taxes. That extra income can be used for such things as a new car, kids travel teams, college tuition, home renovations, and retirement.
In researching, there were only 2 examples provided where the grant might have a negative impact. One is if your health insurance cost is figured off your income. Any increase in income could cause you to have higher insurance costs that would outweigh the financial gain. The other is if your income is used in applying for financial scholarship relief for a child in college or preparing to attend college, or even yourself if you are in a degree program. In either of these situations you should contact the party that oversees them for more information.
Sole provider / licensed for 8 / no subsidy / Quality for ME Step 1
Step 1: $50
Monthly total: $1050
*Payments of this grant which start Oct. 2021 are expected to last a year ending in Sept. 2022. Income received is thus split over 2 tax years: 3 months for 2021 and 9 months 2022.
Oct/Nov/Dec 2021: $3150 / 30% is $945 / income gained $2205
Jan thru Sept 2022: $9450 / 30% is $2835 / income gained $6615
From 8/3/21 OCFS memo: Grant funds are meant to cover COVID-related costs for the following:
Rent, utilities, facilities maintenance, and insurance
Reduction in family cost (i.e. registration fees, weekly child care cost for private pay parents)
Personal protective equipment (PPE), cleaning, and other health and safety needs
Equipment and supplies
Goods and services
Mental health services
Paying for past expenses
Additional administrative expenses due to COIVD-19
COVID-19 testing and contact tracing
Additional food cost due to COVID-19; and/or
To prevent hardship due to closings in response to positive cases of COVID within programs or decreased enrollment
Hazard pay or bonuses to staff.
Staff support can include but not limited to staff sign-on bonuses, current staff bonuses, increased wages, hazard pay or back pay from March 11, 2021 on.
Grant funds may be used to support staff not eligible for the individual grant staff bonuses.
For the staff bonus you need to be sure your employees meet the federal definition: Employees are defined as individuals for whom you withhold and pay any federal and state payroll taxes. Independent contractors or anyone you provide a 1099 Form to are not considered employees.
If you have a wish list of items for future purchase, using grant money is an option. From the research, other states are allowing providers to take the full grant as income for themselves. It is not clear if this will be allowable in Maine. Most providers’ annual business expenses are already covered by collected parent fees. With receipts the grant amount can be used to cover your normal annual business deductions and parent fees would now be your income/profit. It’s all the same total money, just assigned different roles/purposes. Funding a retirement account with the grant may also be allowable. If you have debt for such things as medical expenses, or credit cards, paying those off might be better usage of funds. Paying off accounts like this (with accruing interest) you realize more return on that extra income in the long run. Then you might consider just setting extra income aside for that. All indications are that major renovations are not allowable as a usage for this money. Our situations are all unique and thus how we decide to proceed in usage of the extra income from this stabilization grant will vary
For a number of the business expenses fcc providers can write off as deductions the Time-Space % must be used. Consider that to cover or pay $0 in taxes on $3000 of the grant (at 30% tax) you would need to have deduction receipts that total $10,000. That means an additional extra $10,000 in receipts. Using the scenario of $3450 extra income for 2021, after just paying the 30%( $1035) for taxes you’re ahead $2415 for 2021 if you take the grant.
Many providers do not take all the deductions they are legally able to. Tom Copeland has some strong thoughts on this and has written many posts about taxes and deductions. Check out his posts.
Having some basic knowledge of tax brackets and how they work might help answer additional questions.
Your total income is not what you pay taxes on. Your taxable income is determined by finding your adjusted gross income and then subtracting either the standard deduction or itemized deductions. Here are the 2021 standard deductions amounts for each filing status:
The tax you owe is figured by adding the amount for each of the brackets your income falls under. If you fall into 3 different tax brackets, you pay at those 3 different rates. It is a common misunderstanding that all of your taxable income is taxed at the highest rate. You would add them all up to find your total income tax owed. If you make just enough to fall into a higher tax bracket only the amount you made just over a bracket will be taxed higher. Check your copy of your federal and state tax returns for the last couple of years. You can see if your income and business expenses are aligning or if there is a major change in either. You can estimate what the grant income might do.
You can find charts for all the 2021 tax brackets here.
Here’s how it would work for Married filing jointly:
$0 – $19,900
$19,901 – $81,050
$1,990 + 12% of the amount over $19,900
$81,051 – $172,750
$9,328 + 22% of the amount over $81,050
$172,751 – $329,850
$29,502 + 24% of the amount over $172,750
$172,751 – $329,850
$67,206 + 32% of the amount over $329,850
$418,851 – $628,300
$95,686 + 35% of the amount over $418,850
$628,301 or more
$168,993.50 + 37% of the amount over $628,300
For providers that are thinking about lowering their costs for parents for the year or not raising rates as planned, 2 points to consider:
1 – It’s good business practice to keep your rates at least at the market rate for your county or raise your posted rate yearly considering the annual inflation rate. You do not have to charge families your posted rate. You can apply discounts per family as desired. Annual update of rates helps eliminate big rate changes.
2 – If you decide to reduce costs for families this year, you will not show an increase in your income and thus no taxes will be paid on grant money received. What will the impact be on your rates after this grant has ended?