As I write this webpage in the middle of the Coronavirus recession, childcare center enrollment is down and staff is being laid off. At some point in time, you will start hiring people. Get a $2,400 tax credit for new staff hired. Find out how, and which new hires qualify for the $2,400 tax credit. Information will be emailed to you today.
As of 3/24/2020, Programs dealing with Coronavirus and changing fast. But, here are two additional Payroll Tax Credits & Unemployment Updates for childcare center business owners
Paid Sick Leave Credit
Eligible childcare centers with current employees who are unable to work because of quarantine, self-quarantine, or have Coronavirus symptoms can receive a credit for sick leave if the employee is paid.
The employer can claim the lesser of the employees regular pay rate or $511 per day for a total of 10 days ($5,110 total).
For employees who are caring for others with Coronavirus or a child because school or day care is closed, employers can claim up to the lesser of 2/3 of the employees regular pay rate $200 per day for a total of 10 days ($2,000 total).
Child Care Leave Credit
For employees who are unable to work solely for the need to care for a child whose school or day care is closed, employers can claim a credit equal to the lesser of 2/3 of the employees regular pay or $200 per day.
The difference between this credit and the Paid Sick Leave credit is that it extends up to 10 weeks, resulting in a total benefit of $10,000 for those qualifying. (Question from Jay Whitney: Does this apply to the childcare center employees who have children at the childcare center?)
Childcare center owners should talk to their CPA about these program.
To read the full news release, visit https://www.irs.gov/newsroom/treasury-irs-and-labor-announce-plan-to-implement-coronavirus-related-paid-leave-for-workers-and-tax-credits-for-small-and-midsize-businesses-to-swiftly-recover-the-cost-of-providing-coronavirus
OTHER WAYS TO GET CASH INTO YOUR CHILDCARE BUSINESS:
If you have an existing SBA loan, SBA lenders have unilateral authority to grant borrowers a one time deferment for up to 3 consecutive months (for SBA 7(a) loans) or 6 months (for SBA 504 loans).
Individual and business federal tax returns and PAYMENTS for 2019 are delayed by 90 days. For individuals, this means the federal income tax payment does not have to be made until July 15th!
Coronavirus relief SBA loans are available and more programs will likely be available. Note: Your acceptance of a loan from one federal program may cause your childcare center to be ineligible for other sources of federal funding.
- Congress continues to work on legislation that will provide approved SBA 7(a) lenders with the ability to help small business.
- This plan will allow SBA bankers to give relief loans for our customers. Childcare Brokers can help with these loans.
- SBA is also providing Economic Injury Disaster Loans (EIDLs). EIDLs provide working capital to help small businesses until normal operations resume. These loans are made directly by the SBA bureaucracy. To see qualification parameters or to apply for this loan, click here.
It’s no secret that the American economy is confronting hard times as a result of the impacts of the novel Coronavirus.
Some childcare center owners will need more help than others to weather the storm.
To that end, I have an offer for childcare center owners. I’m offering complimentary 30-minute one-to-one consultation sessions via telephone over the next couple of weeks. I’m here to discuss whatever’s on your mind, whether that might be impacts of the economic downturn on childcare center values and value drivers, financing, refinancing, disaster loans, or Coronavirus relief SBA loans. Simply send me an email if you’d like to schedule a time to chat.
If you were thinking of selling your childcare center before the Coronavirus hit, and now you are thinking that potential buyers may offer less than what your center was worth at the end of 2019, feel free to ask about deal structures that can, if structured correctly reduce your taxes by several hundred thousands of dollars. Creative deal structures and tax planning can save your deal. All I ask is the ability to offer financing to the buyer.