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Preparing for the Child Care Relief Fund

Preparing for the Child Care Relief Fund 2022

Learn how to prepare for the 2022 funding opportunity


Introduction

The COVID-19 pandemic has taken a great toll on Texas businesses, especially those within the child care industry. In 2021, the Texas Workforce Commission (TWC) introduced the Child Care Relief Fund to help child care businesses like yours recover from the pandemic

TWC will offer another round of the Child Care Relief Fund (CCRF) in early 2022 so that your child care business can build back strong and thrive in the post-pandemic economy. The CCRF 2022 is a new funding opportunity that will offer a total of $2.4 billion for eligible child care providers

Eligible providers can expect to be invited to apply for the Child Care Relief Fund 2022 in late January or early February 2022. To be eligible, providers must be:

  1. Open to provide child care services on the date of application; or temporarily closed due to public health, financial hardship, or other reasons related to COVID-19;
  2. A Licensed center or Licensed or Registered home permitted as of February 28, 2022;
  3. In good standing with Child Care Regulation; and
  4. Committed to remaining open through at least May 2023.

The Texas Child Care Business Coaching Team has worked with TWC to review all the 2021 Child Care Relief Fund cases in which providers experienced delays in application processing and receipt of funds. We have compiled a list of action items that you can take now to help you prepare for your 2022 application in advance. These steps will help you to minimize the risk of funding delays and plan for the most effective use for all of your funds. It is extremely important that you are prepared to apply, including making sure your information is up to date and correctly entered in the Child Care Regulation’s CLASS provider portal as soon as possible.

Getting Ready

You can get your child care program ready for the Child Care Relief Fund 2022 in three simple steps:

Step 1: Verify your information with Child Care Regulation

Step 2: Pull together key company data

Step 3: Start thinking about a game plan for utilizing funds

Step 1: Verify your information with Child Care Regulation

As a licensed or registered child care program in the state of Texas, information about your child care program is kept in a system managed by Child Care Regulation. The licensing data in the Child Care Regulation system is used to populate the data in TWC’s Child Care Relief Fund system, but it is a separate system. What this means is that if your information is not correct in the Child Care Regulation system, it won’t be correct in the relief fund system either. Incorrect or out of date information in the Child Care Regulation system can cause significant delays in receiving your Child Care Relief Funding.

For example, a typo in your business name can prevent you from depositing your check when it is received. An out-of-date mailing address can result in a lost check when it is sent. Any incorrect information in the licensing system can prevent you from validating your application and even being able to submit your application without technical support. For this reason, it is extremely important that make sure your information is up to date and correctly entered in the Child Care Regulation system as soon as possible.

As a fraud prevention measure, all changes must first be made in the Child Care Regulation system before they can be made in the Child Care Relief Fund system. Any changes made after the launch of the 2022 round of funding may need to be made manually which can result in delays in application processing. Therefore, we highly recommend that you look at your information with Child Care Regulation now to ensure that you minimize the risk of any delays in applying or receiving your funds.

From our review of cases from the 2021 round of funding, here are some critical pieces of information that you will want to double check.

  • Child Care Program Name – Make sure that the name listed for your child care program is spelled correctly, as this will generally be the payee name on your check. Additionally, make sure that you have a bank account where you can deposit any checks made out to this name. In some cases, you may wish to add a DBA (doing business as) name to your bank account. If the name is not listed correctly in the system, connect with your licensing representative for assistance.
  • Controlling Person Information – The application for the Child Care Relief Fund must be completed by a controlling person who is authorized to assume fiscal and legal responsibility of managing funds for the business. Start thinking about who you want to have complete the application and make sure that they are listed correctly with Child Care Regulation as this information is used to validate your application before it can be submitted. You can update this information manually in the Child Care Regulation system
  • Addresses – It is important to make sure that your location address is correct, as certain zip codes may receive extra funding if located in a child care desert, but it is critical that you ensure your mailing address is correct. Your mailing address is where TWC will send your check. You can update this information manually in the Child Care Regulation system.
  • Email Address – The secure email address on file with Child Care Regulation for your child care program is where all relief fund communications will be sent. Not only will this include all updates and general information emails from TWC, but it will include any contact about issues with your application as well. Do note that if you wish to have the relief fund communications received at a specific email address, you will also have to change the email address on file with Child Care Regulation.

If you know you will have upcoming changes to your licensing information after the second round of funding is underway, be prepared. As the systems are separate, you may need to take the following steps for changes made after the relief fund has begun:

  • Update your information with Child Care Regulation.
  • Notify the technical assistance team of the change to ensure the data is accurate in the relief fund system (contact information for the 2022 Child Care Relief Fund Technical Assistance Team will be available in early 2022).
  • Be prepared to verify the change through screenshots or other methods.

Step 2: Pull together key company data

As part of the application process, TWC will review key information about your organization to ensure that your child care program is set up appropriately in the system to receive payments from TWC. You will want to verify that the data listed is correctly entered to prevent any delays in this process. To be sure you are ready to apply, gather the following pieces of information about your child care program:

  • Legal Business Name – This is your legal business name, not your assumed business name or DBA (doing business as) name. It is imperative that you apply using your correct name information to avoid any delays in application processing or funding. You will want to confirm that your legal business name with the IRS matches the legal business name listed with the Secretary of State. To ensure that you are using your legal business name and that it is listed the same with both the state and federal government, request copies of your IRS 147C and Certificate of Filing with the Secretary of State. Please see Documentation Request Instructions at the end of this guide.
  • Assumed Name/DBA – You may also need to clarify your assumed name, or DBA (doing business as) name when applying. This may be the name on your business license with Child Care Regulation or an alternate name on your business bank account. If you operate under a name that is different from your legal name, be sure that you have this information on hand when you apply.
  • Operation ID – This is the license number for your child care program that is listed with Child Care Regulation. You can find this on the copy of your child care program license as well as in the public database of child care providers.
  • Ownership Type – The ownership type selected will affect the subsequent information that you are required to enter about your child care program. If you are unsure of which ownership type to select, you can review the list below. If your business is registered with the Secretary of State you can also call (512) 463-5555 with questions.
    • Sole Ownership — person with exclusive title or rights to a business; this is a common choice for businesses with an owner and no employees. A sole owner files a Schedule C with their IRS 1040 Individual Income Tax Return.
    • Partnership — legal relationship that exists between two or more persons or other legal entities contractually associated as joint principals in a business. Partners are not employees and are not issued a W-2. Instead, the partnership files a Schedule K-1 (Form 1065) to the partner.
    • Texas Limited Partnership — partnership formed by two or more persons and having one or more general partners and one or more limited partners registered with the Texas Secretary of State.
    • Texas Corporation — corporation registered with the Texas Secretary of State, either profit or non-profit. Corporations will file an IRS 1120 or 1120S Corporation Income Tax Return.
    • Professional Association — entity is registered with the Texas Secretary of State as a Professional Association.
    • Professional Corporation — corporation is registered with the Texas Secretary of State as a Professional Corporation.
    • Out-of-State Corporation — corporation legally chartered by a governmental entity outside the state of Texas.
    • Governmental Entity — any legal government agency not created by the Texas Legislature, such as a city, county, or federal agency.
    • Individual Recipient (this is rare) — an individual who provides goods or services to a Texas state agency or institution of higher education who is not a sole proprietor (sole ownership).
    • Other — organization not defined within one of the other ownership types, such as an estate or informal organization not chartered by the Texas Secretary of State.
  • Federal ID Number – You will need a valid Federal Employer Identification Number (EIN), Social Security Number (SSN), or, in rare cases, an Individual Taxpayer Identification Number (ITIN) for your application to be processed. This will be the number that you use to file your federal tax returns. To confirm your federal ID number, you may wish to request an IRS 147C. Please see Documentation Request Instructions at the end of this guide.
  • Charter Number/Texas File Number – When an entity is organized or registered with the Secretary of State, they will receive an assigned number called a Charter Number or Texas File Number. If you do not know your Charter/Texas File Number, you can call the Secretary of State at (512) 463-5555. You can also request a copy of your Certificate of Filing. Please see Documentation Request Instructions at the end of this guide.

Step 3: Start thinking about a game plan for utilizing funds

It is a good idea to prepare for using these funds now to make sure you can put the money to the most efficient and effective uses for your child care business. Child Care Relief Funds can be used to cover allowable expenses incurred between September 1, 2021 and May 31, 2023. Generally, allowable expenses are those that are necessary to reopen or maintain operations, including your rent or mortgage (including insurance), utilities, payroll, PPE, cleaning supplies, and taxes. More information on estimated award amounts and using your funds is below.

You must have proper documentation of these expenditures. It is important to keep documentation in case you are selected for monitoring by TWC. Child care providers selected for monitoring must comply with all requests for proof of spending or risk having to return funds to TWC. For more information on properly documenting expenses, please refer to the 2021 Child Care Relief Fund Monitoring Guide.

Take a moment to write down some regular, monthly expenses that your child care business has as well as some wish list items that may be helpful in helping your business grow. Keep in mind that the funds function like a reimbursement for expenses that were already incurred.

It is also important to know you cannot claim expenses paid for by:

  • the Paycheck Protection Program,
  • Employee Retention Tax Credit,
  • Emergency or family leave provided under the Families First Coronavirus Relief Act (FFCRA), or
  • Any other stimulus and relief funding program.

2022 Child Care Relief Fund Award Amounts

Your base funding amount is calculated using your licensed capacity and the 75th percentile of the average local market rate for child care in your area. Additional amounts will be awarded based on Texas Rising Star certification, child care desert designation, or Social Vulnerability Index (SVI) score of each location.

To get an idea of how much funding you can expect to receive, you can view the table below which contains the initial estimates for base award amounts. With funding amounts nearly double what they were in the 2021 round of funding, be sure you are aware of the tax implications of receiving Child Care Relief Funds at childcare.texas.gov. 

Table 1. Initial Estimated 2022 Child Care Relief Fund Base Award Amounts by Board, Program Type, and Capacity*

*Please note, these estimated Base Award Amounts will change. TWC will review data from Child Care Regulation on the number of eligible regulated providers as of 12/31/2021 and will use this data to calculate final award amounts.

Board Name

Licensed Child

Care Center;

100 Capacity

 

Licensed Child Care

Home;

10 Capacity

 

Registered Child

Care Home;

5 Capacity

 

 Panhandle

$180,544

$16,345

$7,638

South Plains

$168,792

$15,490

$7,318

North Texas

$161,314

$14,636

$6,784

North Central

$226,481

$20,405

$9,455

Dallas

$224,344

$20,084

$9,294

Tarrant

$237,164

$21,580

$10,042

North East Texas

$149,563

$13,674

$6,356

East Texas

$150,631

$13,888

$6,517

West Central Texas

$149,563

$13,461

$6,250

Borderplex

$154,904

$13,995

$6,517

Permian Basin

$186,954

$16,879

$7,852

Concho Valley

$142,085

$13,354

$6,356

Heart of Texas

$157,041

$14,422

$6,730

Capital Area

$268,145

$24,464

$11,377

Rural Capital

$231,823

$20,939

$9,722

Brazos Valley

$193,363

$17,520

$8,173

Deep East Texas

$162,383

$14,636

$6,784

Southeast Texas

$164,519

$15,063

$7,104

Golden Crescent

$158,109

$14,529

$6,837

Alamo

$207,251

$19,016

$8,920

South Texas

$163,451

$14,849

$6,891

Coastal Bend

$188,022

$17,093

$8,012

Lower Rio Grande Valley

$167,724

$15,277

$7,104

Cameron County

$170,929

$15,490

$7,158

Texoma

$160,246

$14,529

$6,784

Central Texas

$155,973

$14,315

$6,677

Middle Rio Grande

$145,290

$13,461

$6,356

Gulf Coast

$222,208

$20,084

$9,294

 

Using Your Funds

Now that you have an idea of your expected award amount, identify any areas where you think your business might need funding the most. Some examples might include issuing one-time wage supports for staff, purchasing much needed supplies for your program or making minor repairs to your facility. As funds can only be used for certain allowable expenses incurred during September 1, 2021 and May 31, 2023, you may wish to consider using your funds toward regular operating expenses such as rent or utilities to free up extra money that you would have used on these expenses. For more ideas on how to use your funds or any freed-up revenue, see our Tips and Tools for Using COVID-19 Relief Funds Effectively.

Your 2022 Child Care Relief Fund award can be used to cover allowable expenses incurred between September 1, 2021 and May 31, 2023. Generally, allowable expenses include those that are deemed necessary to reopen or maintain business operations and can include:

  • Rent or mortgage (including insurance)
  • Utilities
  • Payroll (salaries, wages, benefits, and employer payments for company benefits and payroll taxes)
  • Personal protective equipment
  • Cleaning supplies
  • Taxes

Payroll costs are eligible expenses under the Child Care Relief Fund. Make sure that you are ready to use funds to cover your W-2 employees by reviewing your current payroll set up. You can learn more about paying your employees and yourself at childcare.texas.gov.

With the current market for quality child care employees being so competitive, funds can also be used to give your child care program an edge when it comes to attracting the best talent to your organization. Consider using funds to offer temporary pay increases or raises to help attract or retain quality employees.

Getting Help

TWC has contracted an expanded technical assistance team that is currently gearing up for the 2022 round of funding. Contact information for the team will be available in early 2022 when the application is available. You can learn more at childcare.texas.gov as information is released. In the meantime, please visit the following links for more assistance:

For questions about the upcoming 2022 Child Care Relief Fund: https://www.childcare.texas.gov/ccrf2022update

For questions about the 2021 Child Care Relief Fund: https://www.childcare.texas.gov/ccrf2021update 

 For questions about free business coachinghttps://www.childcare.texas.gov/free-business-coaching?hsLang=en

Records and Monitoring

As a condition of your receipt of Child Care Relief Funds, the TWC reserves the right to request documentation for all expenses to which you applied relief funding. To ensure the proper use of funds, some providers will be selected for monitoring by TWC. The monitoring session will review your receipts and proof of payment to ensure that all expenses claimed are considered allowable and valid. If there is insufficient proof of payment, the TWC may require you to pay back the funds.

Failure to comply with the monitoring process may result in the Texas Workforce Commission recovering awarded funds. For more information on monitoring, please see the 2021 Monitoring Guide.

Documentation Request Instructions

Request for IRS 147C Letter (Confirmation of TIN and Entity Name) 

  

Initiating a payment from the Uniform Statewide Accounting System requires entities and individuals to be set up on the State Comptroller’s - Texas Information Number System (TINS).   Establishing this information includes validating the taxpayer identification number and entity name to the data registered with the Internal Revenue Services (IRS).  To complete this process, we are requesting a copy of an IRS 147C Letter for the entities or the individuals. The letter can be obtained from the IRS at no cost.  The request to the IRS can be handled through a phone call, and the 147C letter can be faxed to the requestor. 

  

Instructions for Requesting a 147C Letter from the IRS 

  1. Contact the IRS Business and Specialty Tax Line at (800)829-4933.
  2. When the call is answered, select option 1 for English.
  3. Next, select option 1 for information related to your EIN.
  4. Next, select option 3 indicating you have an EIN but need a confirmation letter.
  5. Ask the IRS representative to fax a copy of the 147C Letter for your entity.  You will need to provide your taxpayer identification number, entity name, your name, your contact phone number, and your fax number.  The caller will be asked to confirm that he or she is authorized to receive the requested information.

Request for Certificate of Filing (Confirmation of Legal Name and Charter Number)

Copies of a Certificate of Filing issued by the Secretary of State regarding filings may be ordered in four ways:

  • Online: SOSDirect
  • By phone: (512) 463-5578
  • By email: corpcert@sos.texas.gov
  • By mail:
       Certifying Team
       Secretary of State
       P. O. Box 13697
       Austin, Texas 78711-3697

You can also call the Secretary of State at Secretary of State at (512) 463-5555 for more information.