During this time as the nation faces the challenges related to COVID-19, CED has compiled a clearinghouse of resources in an effort to help child care providers access federal sources of support. Many child care providers (child care centers and homes) will newly qualify for access to working capital through a variety of programs. We will add to this list of resources as information becomes available.

RESOURCES

American Rescue Plan (P.L. 117-2, March 11, 2021)

  1. Overview Resources
  2. State & Federal Unemployment Compensation
  3. U.S. Department of Treasury, Internal Revenue Service
    • Employee Retention Tax Credits. The Employee Retention Tax Credits are refundable and reduce an employer’s payroll taxes. This tax credit was scheduled to expire after the 2nd quarter of 2021 (June 30, 2021). Under the new law, the amount of the credit, which was based on the employer’s share of Old-Age, Survivors and Disability Insurance (OASDI) payroll taxes is shifted to the employer’s share of Hospital Insurance (HI) taxes for calendar quarters after June 30, 2021. The tax credit is extended through December 31, 2021.
    • Paid Sick and Family Leave Tax Credit. The new law extends the paid sick and family leave tax credit (first created in the Families First Coronavirus Response Act in March 2020) for the next two quarters -- through the end of September 2021. This tax credit was scheduled to expire at the end of the first quarter of 2021 (March 31,2021). The use of the tax credit by employers remains voluntary (i.e., there is no employee entitlement to paid leave, which expired in 2020).  The amount of the credit, which was based on the employer’s share of Old-Age, Survivors and Disability Insurance (OASDI) payroll taxes is shifted to the employer’s share of Hospital Insurance (HI) taxes for calendar quarters after March 31, 2021.
    • Unemployment Compensation.  Under the new law, up to $10,200 in unemployment compensation is exempted from federal tax for 2020 income for taxpayers with income under $150,000.
  4. Child Care Assistance

    Through the U.S. Department of Health and Human Services 

    Through the Internal Revenue Service (tax code changes) 

    • Child and Dependent Care Tax Credit (CDCTC).  Under the new law, the CDCTC is temporarily increased (for 2021),
      • the maximum tax credit rate is 50% for taxpayers with income up to $125,000.
      • annual child care expenses against which the credit percentage is applied are increased to $8,000 for one child and $16,000 for two children. Therefore, the maximum credit at a 50% rate is $4,000 for one child and $8,000 for two children.
      • the credit percentage of 50% is phased out (but not below 20%) by one percentage point for each $2,000 in income above $125,000. Also, the 20% credit is phased out for income above $438,000.
      • the CDCTC was made refundable.
      • The credit applies to taxable year 2021 and sunsets December 31, 2021.
    • Dependent Care Assistance Plans (DCAPs).  Under the new law, if an employer offers a DCAP to employees, the amount of income that can be set-aside by employees is temporarily increased (for 2021) to $10,500. The increase in DCAPs applies to taxable year 2021 and sunsets December 31, 2021.
  5. Additional Resources

The FY2021 Consolidated Appropriations and COVID-19 Emergency Relief Act (P.L. 116-260, December 27, 2020)

  1. U.S. Small Business Administration Assistance
  2. State & Federal Unemployment Compensation
  3. U.S. Department of Treasury, Internal Revenue Service
    • Employee Retention Tax Credits. Under the CARES Act, the Employee Retention Tax Credits are refundable and reduce an employer’s payroll taxes. The new law extends and modifies the Employee Retention Tax Credit. Beginning on January 1, 2021 through June 30, 2021,
      • The credit rate is increased from 50% to 70% of qualifying wages
      • Per employee creditable wages are increased from $10,000 per year to $10,000 per quarter
      • Eligibility for the credit is expanded by reducing the quarterly gross receipts decline from 50% to 20% (i.e., a 20% decline in gross receipts in the same quarter in the prior calendar year)
      • Allows the credit for employers with 500 or fewer employees, and
      • Other changes.
    • Paid Sick and Family Leave Tax Credit. The new law extends the paid sick and family leave tax credit (first created in the Families First Coronavirus Response Act in March 2020) through the first quarter of 2021 (March 31,2021). 
    • The New Markets Tax Credit and Work Opportunity Tax Credit are extended through 2025.
    • A summary of all of the tax provisions contained in the new law is here
  4. Child Care and Development Block Grant Funding
    • $10 billion for child care was provided under P.L. 116-260. The statutory language can be read here
  5. Additional Resources

The Families First Coronavirus Response Act (P.L. 116-127)

Business Support

U.S. Small Business Administration (SBA)

The SBA provides numerous supports that can aid in disaster recovery (such as the current COVID-19 national emergency), including new “forgivable loans” that equate to grants if used for specified purposes as well as low-interest loans to help businesses during this uncertain time. The SBA also oversees several centers and agencies that offer direct support to small businesses, including business owners from underrepresented populations, such as Small Business Development Centers, Women Business Centers, and the Minority Business Development Agency. See more information in the links below.

Note: On March 12, 2021, the U.S. Small Business Administration announced an extended deferment of 1 year for all disaster loans until 2022. For example, all SBA disaster loans made in 2020 will have a first payment due date extended from 12 months to 24 months from the date the loan is disbursed.  All SBA disaster loans made in 2021 will have a first payment due date extended from 12 months to 18 months from the date the loan is disbursed.  Borrowers with loans prior to 2020 will also receive a one-year deferment in repayment.  In all cases, interest will continue to accrue.

Community Development Financial Institutions (CDFIs)

Community Development Financial Institutions (CDFIs) are local, mission-driven financial institutions that take a market-based approach to supporting economically disadvantaged communities. CDFIs finance community businesses, including small businesses, microenterprises, nonprofit organizations, commercial real estate, and affordable housing.

U.S. Department of Labor

The U.S. Department of Labor has created a COVID-19 web page, which provides details on paid leave, unemployment, and other resources available to individuals, families, and employers.  See CED’s unemployment compensation brief for an overview related to recent Congressional changes to ensure that more individuals can access unemployment benefits during this national emergency.

U.S. Department of Treasury, Internal Revenue Service (IRS)

The Internal Revenue Service (IRS) is working to ease the tax burden during these uncertain times and has created an IRS COVID-19 web page, which provides details on stimulus rebate checks, paid leave, and other information related to recent Congressional action to provide tax relief and benefits to individuals, families, and employers.

Child Care Specific Support

U.S. Department of Health and Human Services, Office of Child Care

Child Care Business Support Webinars

The U.S. Department of Health and Human Services, Office of Child Care, funded two business support webinars in January 2021 to help child care businesses understand available federal business relief options as enacted through the FY2021 Consolidated Appropriations and COVID Relief Act (P.L. 116-260) enacted in December 2020. The first webinar was hosted by First Children’s Finance on January 19, 2021. The second webinar was hosted by Tom Copeland on January 23, 2021. Tom Copeland hosted an additional webinar on March 4, 2021 to help businesses complete the PPP application.

Podcast: How Child Care Businesses Can Survive COVID-19

In the following two episodes, a panel of financing experts explores options that child care centers and family child care homes should consider in reviewing available new federal program supports in the CARES Act for both short-term economic viability, as well as for the recovery post-COVID-19.  The podcast is a “must hear” for anyone operating a child care center or a family child care home who wants to better understand not only available assistance, but also ways to think through prioritizing business expenses and to support economic viability in the short- and long-term.

Other Federal Agencies

U.S. Department of Agriculture (USDA) - Rural Development

The Rural Development agency of the USDA directs several programs that provide financial backing and technical assistance to stimulate business creation and growth. The programs work through partnerships with public and private community based organizations and financial institutions to provide financial assistance, business development, and technical assistance to rural businesses.

U.S. Department of Commerce Economic Development Administration (EDA)

EDA 's role in disaster recovery is to facilitate the timely and effective delivery of Federal economic development assistance to support long-term community economic recovery planning and project implementation, redevelopment and resiliency. Congress approved an additional $1.5 billion for EDA assistance in FY20 emergency funding through the Coronavirus Aid, Relief, and Economic Stability (CARES) Act in March 2020. 

U.S. Department of Housing and Urban Development (HUD)

The Department of Housing and Urban Development (HUD) is responsible for national policy and programs that address America's housing needs, improve and develop the Nation's communities, and enforce fair housing laws. In support of community development, HUD manages the Community Development Block Grant (CDBG) which provides funding for community development and may be leveraged by states for coronavirus recovery.

Federal Assistance Programs

Find assistance programs for eligible individuals including unemployment benefits, healthcare benefits, and emergency business loans.

Child Care

Head Start

EPA

Food & Nutrition

Federal Reserve Board Reports

Other