Childcare Grants and Taxes- Questions
 

My business received two grants from First 5 this year.

One was a quality award grant. It did come with stings attached. I had a list of approved items I could spend it on. (Eg: curriculum, increasing employee wages, trainings, etc)

The second was a health & safety reimbursement grant. First 5 came out and assessed my program and gave me a very specific list. I could buy only the "safety improvement" items from the list and then get reimbursed after completing the project to their statistic action, or I would get nothing.

My questions are:

Are grants in any way different from the income I receive from parents in the eyes of the IRS?
And, if so, are these two grants treated differently?

I think Tom Copeland answered this here: https://www.daycare.com/forum/showthread.php?t=67741

"You must report as income the value of your scholarship and the $500. Then, you can deduct as a business expense the value of the scholarship and the $500 based on the normal rules of depreciation. "

grants
 

Originally Posted by spedmommy4:
My business received two grants from First 5 this year.

One was a quality award grant. It did come with stings attached. I had a list of approved items I could spend it on. (Eg: curriculum, increasing employee wages, trainings, etc)

The second was a health & safety reimbursement grant. First 5 came out and assessed my program and gave me a very specific list. I could buy only the "safety improvement" items from the list and then get reimbursed after completing the project to their statistic action, or I would get nothing.

My questions are:

Are grants in any way different from the income I receive from parents in the eyes of the IRS?
And, if so, are these two grants treated differently?

You must report these grants as income, in the same way as parent tuition. You can then deduct as business expenses the items you purchase.

Originally Posted by TomCopeland:
You must report these grants as income, in the same way as parent tuition. You can then deduct as business expenses the items you purchase.

Thank you Tom.