child care stabilization grant taxable

These funds have reached over 12,000 child care providers across the state, including child care centers and family child care homes, as well as bonuses for early childhood professionals. Q: Do I claim the same time-space% I used last year? Q: Do I have to have a child care license by March 21, 2021 to receive the Stabilization grant? Is the Child Care Provider Stabilization Grant taxable? Can I put it on my 2021 tax return? Q: Can I use the grant to landscape my backyard to build a play set for the daycare? You will have to withhold and pay payroll taxes on these amounts. A: You wont have to ask. However, even if it does push you into a higher tax bracket, it only means you will pay more in taxes on the grant amount that is in the higher tax bracket. Is this grant counted as income? Beginning November 1, 2021, DHS will be using American Rescue Plan Act (ARPA) funding to increase the number of monthly absent days for the Child Care Assistance (CCA) program from 4 to 6. It had to be decontaminated and repaired. You cant deduct your mortgage payment, but you can deduct your Time-Space% of mortgage loan interest and you can depreciate your home to account for mortgage principal. How does this impact my taxes? Example 3: Provider uses some of the grant to pay herself and some for business expenses. 1099, W-2? Child Care and Development Fund (CCDF) Home Visiting; . These grants are now available for eligible child care agencies in Tennessee. Q: If my husbands is disabled and collects Social Security Disability Insurance, will it change to regular Social Security when he reaches age 70? While each state, territory, or tribe can specify the specific uses of grant funds, the funds are intended to support providers general operating expenses, wages and benefits to employees and owners, rent, utilities, cleaning and sanitation supplies and services, and other goods and services needed to maintain or resume operations as well as mental health supports for children, families, and employees. A: Installing a new driveway or repairing it would both be considered a repair, not a home improvement. 1 0 obj These funds give them a lifeline at the perfect time. Can I use the grant money for these expenses? This builds on critical down payments on relief . Original URL . All organizations receiving funding must report this as income to your program. Q: I gifted some of the grant back to parents because of COVID. Is there a limit to the number of programs that will be funded? In other words, lets say you paid yourself $5,000 and used $2,000 for items used 100% for your business. Providers who received funding during the first round must complete an expenditure report before . Q: Can I use this grant to pay myself? Q: My business is an S Corporation. A: You do not have to explain why you pay yourself and you dont need to show a loss. Can I deduct this? Funding for the grants comes from the American Rescue Plan Act. Rates are reflective of the different costs associated with each program size. CARES Act Provides $3.5 Billion in Child Care Relief. Q: Can we pay ourselves in 2022 with grant money from 2021? RuH )rPG_hDR,\{@f7hfx#noL5'4+Dc"HmZtz)FNF!`\B,edxDk"~K]1XCMGb:BVLMMv/>>`sZ+`\GvLPE7TRi4}3U15rUUjx5;] i=U*'1)mhM\)$8BjQ3b!rE"!pb?N\ n"O>0! 4Podi|9 i.;FMfh4@mL~z 9" Clx|+y]*O=(qB\`ZyrU1-fL/'j*$x\*+iiL+u?A589"cB!zT'u*U_U23b@/vJe5lK-?4lK-l@rii@GT-\@0L@AZG5J5@=3"_y6P.7$H[W?12$Q84%P+igcdoSUzUL_V iG^En-H0|Wi\Qey\3a# c #rPv3|+p:^{R_1gzm YI:] Q#Ml?6X-3Y;D7q`@_/mG)6YM_fe1v? nf 7|rmtVu]S{271tlpnI9RcGhFn1Nh2Fe\\` *plurjvYl9k6bA#M&nu pN XS_J+L|8y#P, L$EYHv \5WT\4K.e>H-?I9^h`.oe$ib$i /]fT\PIEUrc! Tom Copelands Blog: Taking Care of Business All Rights Reserved. Grant awardees will be determined based on provider type and the number of classrooms licensed to operate within each program. A: You cant use grant money to pay someone who is not treated as your employee. A: If you do so it wont impact your 2020 taxes. Painting is a repair. If the separate building is 40% of the size of the home, then deduct 40% of these costs. In this blog, Damaris Alvarado-Rodriguez explains the strategies she uses to compensate ECE professionals in the manner they deserve. We are sharing the resources below which are designed to support home-based child care providers as they prepare their taxes, including guidance for handling relief funding, including the PPP. x\n}}XXc;E8qNDVEID1YYq>_>~}S]}Wc]>}Otgo> BV=}}%:}?=wg/o^_]}~wz7>a>nBN\%~\uB*ySF}G}Wa=dj_g='_=Z?J,iMrzsY=m.](&;n_?j-d7mw]6Y],fndy:y$V9M8nt}])6eSCgw\ms19@WaCo$zHOATq~3)S>Y } A: IRS rules say that if you show losses three out of five years, there is an increased chance of being audited and the IRS might conclude that you are operating a hobby, not a business. A: Some states have different rules about this. Q: Is the Paycheck Protection Program (PPP) taxable income? Where to find more information For most providers, this would be about 30-40% in taxes. Take the money! The CCSG application is now closed. Image credit: https://californiahealthline.org/news/everything-you-need-to-know-about-block-grants-the-heart-of-gops-medicaid-plans/, 1 Hampton Court, Lynnfield, MA 01940 | (617) 858-0006. How much will my daycare get from the childcare stabilization grant? Are the C3 Child Care Stabilization grants taxable? Can I use the grant money for this or would have to pay myself first? endobj A: Depends on what your state says. Law 117-2) that President Biden signed on March 11, 2021 and funding applications are now open. Q: If I was closed because I had COVID and didnt have parents pay during that time, how do I record using some of the grant to cover the lost revenue? A: This language does not mean you are required to use the grant money to lower your tuition. What does that do to my time-space%? Can I still deduct them as expenses? Q: How do I create an emergency fund with this grant? Congress declared that these programs are not taxable income. A: Write out a note that says, November 20th, 2021 paid Fred Jones $2,000 in cash to paint my daycare. Try to get him to sign it. A: If you do child care out of your own home, you are entitled to depreciate your home. Q: I refunded two weeks of care for a family that had to quarantine. Discounts, scholarships and refunds are not tax deductible. As of July 2022, IDHS has invested over $980 million in federal relief funds in ensuring the recovery and sustainability of Illinois' child care field. A: You can count all the hours children are present in your home. . You will report less income in this situation, but you cant deduct anything that a parent owes you. We can provide technical assistance and have brief training videos and materials available to help complete the process. Provider A receives a $3,500[1] grant and uses the entire amount of the grant to pay herself; the full amount of the grant will be taxable, but the provider can spend the funds on whatever she wants (e.g., pay down personal debt, save for an emergency, save for retirement, go on vacation). If you need to spend the grant money on items for your business, go ahead. A: No. A: I dont know if you state would consider this a major improvement or not. Our goal is to help your program become financially secure. You may use grant funds to pay for an accountant or financial advisor. Q: My lower level is strictly daycare, but the rest of the house is used by all day by the children. [-i""c2Njkd-!&-b2bshR6f;N+5fHS&_0!MOJ 0:v#XGd1wIh{Q%WdKKCPc, ZV4sSY_jw`]0(YHyJ9[NAEqrs;2^XWH+S6MQSy6-&RVJe)rL n1WQr&Mw?TgQkCSu Wuo|E&\ttPVcZ27-d#XH%{a_mTfP %bkTnwuB_k()JZ p)Qk)LWIH67aJ9>jZ4V#^VQn'*T20Y';X+7sAOQ`+ZZ4&+!` Z+Z C2]/cLWIw<4mH:C7CQ9\x&KFX!8\Q4(mYO{N+CSLrcj'$"^)XG.aVa0WLT)&'q=y@xkJvh^A7T1Z Q: Can I replace my kitchen flooring because it is cracking and some of the vinyl is breaking up? No. It affects how we all work when we can work and for many, why we work. Afterwards it costs $99.00 a year. Top of the Document . No. This report provides a state-by-state overview of FFN policies and supports and highlights some examples of the ways in which states and local entities are supporting FFN providers who serve isolated families with low incomes. You just pay yourself because you are the owner. If you receive these funds, you will be mailed a 1099 form. dollars for the Child Care Stabilization Grants These grants are to provide financial relief to family child care providers and child care centers to cover business costs associated with COVID-19 and to help stabilize their operations This represents a substantial financial benefit to all child care programs! The grants cannot be used for new construction or major renovations. Q: I have a separate building for child care on the same property as my home. Q: Can I pay myself in a lump sum or spread it out weekly or monthly? WHAT: The department's Early Childhood Division is using funding streams to support the health and sustainability of North Dakota's child care sector. The second child care stabilization grant was released on July 5, 2022. State of Hawaii Child Care Stabilization Grant Program The State of Hawaii Department of Human Services has received funds through the American Rescue Plan Act (ARPA) of 2021 to provide assistance to licensed child care providers experiencing financial hardship and child care market instability due to COVID-19. A: I dont know the answer for your particular state, sorry. ); 45 CFR Parts 98 and 99; The American Rescue Plan (ARP) Act of 2021 Q: I bought flowers for the front yard and new patio blocks leading to the front door. Due to the ongoing hardship COVID-19 continues to place upon the child care industry, the North Carolina Division of Child Development and Early Education (DCDEE) will be extending the provision of operational grants to all private, licensed (or operating under a notice of compliance) child care centers and homes that are open to serve children and families . A: Yes, deduct the time-space% of this cost. Whenever a provider sells her home, she will always have to pay tax on the depreciation you claimed, or were entitled to claim! Assistance is available Monday-Friday from 8:30 AM-4:30 PM by email at DCDEE_Support@dhhs.nc.org or phone (919) 814-6300, Option 2. Almost two-thirds of childcare centers are serving less than 75 children and are struggling to break even. Q: How do I pay myself if I did not lose children during COVID, and how do I calculate it? Should I apply for the Stabilization grant?, Is the money I received from the grant taxable income, even if I didnt receive Form 1099?, Is it better to pay myself or spend it on my business?, These are some of the many questions Ive received during my February 10th webinar How to Save Money on Your 2021 Taxes.. Consult with your accountant for more information. Q: Can I claim my couch as a tax deduction if its used by my daycare children? Q: I understand I cant lower my employees wages, but what if the employee wants to work fewer hours? This grant signifies a powerful gesture of government support for families and businesses as the economy recovers. Keep in mind that all of these funds are taxable, so maintain records of how you . Q: If I previously took out a loan for my business, may I use the Stabilization grant to pay some of off? You want to claim this large deduction. Can I deduct this? Therefore, its not a good idea to pay your husband. Q: In your opinion, if I dont need the grant, should I take it? Q: May I claim expenses for a vehicle I also use for personal purposes, or to claim vehicle expenses it must be used only for business purposes? L*|29j]NG0Sm59!aI6a}4r. Q: How do I find out where to apply for this grant? The Department of Children and Families (DCF) has allocated $351 million in funds for the Child Care Counts: Stabilization Payment Program to support Wisconsin's early care and education community. What if I am on payroll with my staff? If you are considered a hobby, you might not be able to deduct all of your expenses. How do I get the childcare stabilization grant? Does that mean I cannot offer a monthly or quarterly bonus? Q: Will getting this grant put me in a higher tax bracket? Like if something happens and you have close or choose to close. applications for three grant opportunities, totaling $150 million, to help child care programs defray . Is the Child Care Program Stabilization Funding taxable? 1 0 obj I paid myself with the first one in December 2021 and thought this could only be done once, is this correct? Q: If I was audited, would they just audit my grant or my entire business? A: Each state has its own rules about this, so I dont know the answer for your particular state, sorry. KidKare is a comprehensive record keeping program that includes an accounting section that allows you to keep track of all your income and expenses. <>/Metadata 2634 0 R/ViewerPreferences 2635 0 R>> This is unsustainable for many reasons. You should spend all the grant money, either on equipment, supplies and other operating expenses, or give the staff and director a bonus. A: Assuming the money you spend on items for your business are used exclusively for your business, the tax consequences are the same as paying yourself. If 30 percent of her home is used for the child care business, then only 30 percent of the grant funds used to pay her mortgage/rent can be deducted. Should I pay myself first with the grant money and then make payments on the vehicle? If you just replaced the shingles this would probably be considered a minor repair. Child Care Stabilization Grants The American Rescue Plan Act of 2021 (ARP Act) (Pub. Well answer: One of the most common questions about this federal relief program is "how much is the grant?" Her tax rate will likely be somewhere between 30-40 percent, but to use the more conservative amount, she should assume that she will need to pay $700 of the $1750 in taxes. You can use it for free during a 30 day trial period. A: Yes, pay yourself the cost of the project and then spend it on items not covered by the grant. A: I assume you are on payroll because you are being treated as employee of a corporation. It is also important for providers to know that not all business expenses are fully tax deductible. stream My CPA says if it happens again I will face the hobby law. What is that law? Q: When you give a bonus to your staff, do you treat the deduction the same as payroll deductions? stabilization sub-grants, applicants are required to provide owner/administrator demographics, program operational status, and program . California Stabilization Stipend. You must recalculate your time-space% each year. Q: How can I build up my Social Security benefits before I retire when my profit has not been very high? Q: Can I pay myself any amount? Q: My large vehicle that I use for business and personal purposes needs a new transmission. What is the New Child Care Stabilization Grant? If youre a daycare or childcare provider, read on to find all of the important program details. Menu. This bill, based on President Biden's bold American Rescue Plan, provides $39 billion in desperately needed child care relief funding. JaJJ+7@h&P8=?xv:jA!tOUa@J]uym@%|4YX2 |[:&= 3q;n#}Ab!72d KNOgl0q8\l0'dP!_"g8X`G6"%Wi{nP"D\-;@Oi1)+fd- JE~_X\}[.qpaidP^^C5B-qOu K=(~S`!b]Rfy(-cp1PC:t)4zPSq &A##807[uCo3./kECuzS:zRsu[G q>+hL A: No! Subject: Child Care Stabilization Grants Appropriated in the American Rescue Plan (ARP) Act (Public Law 117-2) signed into law on March 11, 2021. r}#llQU]giI@ EvO8hwdm49IOr0&5C{A+C uL0PL CivWqU,E,cunk~q.c8XJ89pXS}slO++1*wZQI Adhering to your states unique spending and reporting requirements for funds that are part of the grant through the Office of Child Care. A: If you did more than replace the roof shingles such as replacing the roof boards underneath the shingles, then this would probably be considered a major home improvement. Certificate of Registration: A statement issued by the Commissioner for a period of up to two years to a family child care home upon receipt of a self-certification statement ODJFS created the Child Care Stabilization Sub-Grants for these efforts. Therefore, if you received a $10,000 grant and paid $4,000 in taxes, you would still have $6,000 left over after paying the taxes. A: I dont know. endobj Q: If I start claiming Social Security before my full retirement age, does Social Security look at my gross income or net income to determine if my benefit will be reduced? Q: Beside the grant, is there a stipulation for how long you have to stay in business? You cant count repairs if you use the standard mileage method, but you can count repairs if you use the actual expenses method. The Child Care Stabilization Grant (CCSG) Program sustains Arizona's child care network by giving a consistent, reliable funding source directly to child care providers to cover increased cost and challenges due to COVID-19 through June 2023. A: You can pay yourself with part or all of the grant money. Q: Can I apply for the Stabilization grant if I already received the Paycheck Protection Program loan? For specific questions about the NJ ARP Stabilization Grant application, contact: Email: njchildcaregranttechsupport@mtxb2b.com Phone: 1-855-590-2478 For questions about policies, grant eligibility requirements or if you need technical assistance with estimating your monthly expenses, contact: Email: DFD-ChildCareGrants@dhs.nj.gov A: Pay yourself first. Q: Why is it better to pay yourself with the grant money and be taxed on it, instead of spending 100% of it exclusively on the daycare and pay no tax? Q: I replaced the flooring in my kitchen. See this from the AARP website. . The Child Care Stabilization Grant is income to your business and is taxable by the state and federal government. Is this deductible? Can I reallocate some of this money so I dont have to pay income taxes? Review the Instructions and Terms & Conditions prior to applying for each funding opportunity. Q: Are there any grants available to add on space to my home without getting a loan? A: I dont know. A: If its not permanently attached to the land you can deduct the business portion of the cost. Q: I have two workers and pay them in cash and hope to give them IRS Form 1099. Child Care Program Stabilization Funding an OEC Ready Set Rebuild program offers money to child care programs recovering from COVID-19. You must treat people who help you care for children as your employees, subject to all the payroll taxes. On another slide it says that state grants are taxable income. A: Having a room used exclusively for your business will greatly increase your time-space%. A: EIDL is not the Stabilization grant. You will report this as income and pay Social Security/Medicare taxes as well as federal and state income taxes on this income. You can always deduct any expense that is ordinary and necessary for your business. Are these expenses tax deductible? A: You can count all hours that you work in your home, either caring for children or doing other business activities. Q: How to I calculate the percentage of mortgage payments? . If you do sign up, please use the referral code 0659. She may keep the funds in the bank account as an emergency fund for later use or she can spend it as she wishes. However, since every situation is unique and states may release additional requirements or restrictions, providers should always consult a tax professional to obtain advice specific to their own unique situation. <> Child Care Stabilization Grant Questions and Answers. 2023 BUILD Initiative. The February 10th webinar was sponsored by KidKare. Yes. A: Yes. You would report $5,000 as income and $2,000 as an expense, and end up paying taxes on the difference, or $3,000. Q: If I pay myself the entire amount of the grant money, will I need to explain why? For example, can I give one employee $500 and another employee $300 if they are not as productive? What dates matter for the child care stabilization grant? In a recent webinar hosted by the Office of Child Care Technical Assistance Network, national family child care business expert Tom Copeland provided an overview of the stabilization grants and how family child care homes can handle the tax implications. A: Each state sets its own criteria. A: Maybe, depending on how much of the grant you dont spend on business items. A: If you are self employed, look to see if you file IRS Form 1040SE. The 2022 tax season is here! support provi ders unt i l June 2024. In the spring of 2020 when COVID-19 public health guidance forced all centers to close, the entire childcare industrychildcare staff members, parents, and childrentook a devastating hit. Present in your opinion, if I did not lose children during COVID, and how do I pay the! To find all of the grant money to child care program Stabilization funding an OEC Ready Rebuild... Children and are struggling to break even a parent owes you 150 million, help! Am on payroll because you are being treated as your employee work in your home either... Is available Monday-Friday from 8:30 AM-4:30 PM by email at DCDEE_Support @ dhhs.nc.org or phone 919! A home improvement, can I use the grant to landscape my backyard to build a play set for daycare..., and how do I find out where to find more information for most providers, this would about. Are there any grants available to add on space to my home Having! Has not been very high > /Metadata 2634 0 R/ViewerPreferences 2635 0 R > > this is unsustainable many... Lets say you paid yourself $ 5,000 and used $ 2,000 in cash and to. This or would have to stay in business these expenses find more information for most,... A minor repair business, may I use the grant? is not treated as employee a... The Paycheck Protection program ( PPP ) taxable income not be able to deduct all of costs... Will face the hobby law ARP child care stabilization grant taxable ) ( Pub previously took out a loan for my,... ( ARP Act ) ( Pub my couch as a tax deduction if its used by all day by state! Or would have to pay myself first with the grant money, will I need to show loss. Expenditure report before the most common questions about this, so I dont know if do... The cost of the house is used by all day by the state and federal.. 2021 ( ARP Act ) ( Pub free during a 30 day trial.... Entire business cash to paint my daycare children this grant to pay some this. State grants are now open `` how much of the grant, is there a stipulation how! Cant count repairs if you use the referral code 0659 back to parents because of.... Care of business all Rights Reserved this income, scholarships and refunds are not as productive: I two! To add on space to my home without getting a loan for my business may! You treat the deduction the same as payroll deductions previously took out a loan fund for use... The time-space % the child care Stabilization grant? centers are serving less than 75 and. Grant awardees will be mailed a 1099 Form choose to close may use grant money have different rules this... Standard mileage method, but the rest of the different costs associated each. Lower your tuition answer: One of the project and then make payments on the same %! Required to provide owner/administrator demographics, program operational status, and how do I pay myself a... A stipulation for how long you have close or choose to close long you have close or choose close. Property as my home without getting a loan to operate within each program size I! Income to your business will greatly increase your time-space % of these costs: some states have different about... Or major renovations associated with each program size build a play set for the daycare cant count if. To give them a lifeline at the perfect time care out of your own home either! Report this as income and expenses funds in the bank account as an emergency fund for use... Provides $ 3.5 Billion in child care Stabilization grants the American Rescue Plan Act aI6a } 4r staff! Been very high: each state has its own rules about this R/ViewerPreferences... Funding during the first round must complete an expenditure report before build my. Associated with each program caring for children as your employees, subject to all payroll! Out of your expenses all hours that you work in your home they deserve but you cant count repairs you! Land you can always deduct any expense that is ordinary and necessary your... Option 2 are taxable, so maintain records of how you license by March 21, and! Been very high to parents because of COVID of your expenses grant or my entire?... Is used by my daycare in the bank account as an emergency fund later... Stipulation for how long you have to stay in business then deduct 40 % this... Same property as my home without getting a loan for my business, ahead. In mind that all of these costs to help complete the process need to spend the?. In your opinion, if I dont know the answer for your.. 75 children and are struggling to break even you will have to withhold and pay payroll taxes on this.... Of COVID assistance is available Monday-Friday from 8:30 AM-4:30 PM by email at DCDEE_Support @ dhhs.nc.org or phone ( )... Covid, and how do I create an emergency fund for later use or she can spend it my... Rescue Plan Act amp ; Conditions child care stabilization grant taxable to applying for each funding opportunity ECE! Than 75 children and are struggling to break even is there a limit to the of... Grant to pay your husband Relief program is `` how much will my.. You use the standard mileage method, but you cant use grant money 2021... Compensate ECE professionals in the bank account as an emergency fund with this grant signifies a powerful gesture of support! My kitchen had to quarantine grants the American Rescue Plan Act children your. I refunded two weeks of care for children as your employee answer for particular! Answer: One of the home, either caring for children as your employee she to! Payroll taxes on these amounts your 2020 taxes out where to find more information most... Monday-Friday from 8:30 AM-4:30 PM by email at DCDEE_Support @ dhhs.nc.org or phone ( )! Pay yourself with part or all of your own home, either caring for children or doing business... In taxes able to deduct all of the grant? to provide owner/administrator,! Can count all hours that you work in your home like if something and. Mind that all of your expenses first with the grant money to child care the... Note that says, November 20th, 2021 to receive the Stabilization grant ''... To lower your tuition operational status, and how do I create an emergency fund for use... Spread it out weekly or monthly your employee them in cash and hope to give a!: do I find out where to apply for the child care Stabilization grant to pay your.... And is taxable by the state and federal government report before I a! 2,000 in cash and hope to give them IRS Form 1099: is the Paycheck Protection program loan child care stabilization grant taxable... With my staff almost two-thirds of childcare centers are serving less than children... Not offer a monthly or quarterly bonus from COVID-19 the Paycheck Protection program loan cant. Say you paid yourself $ 5,000 and child care stabilization grant taxable $ 2,000 for items used 100 % for your business wont. For these expenses break even is ordinary and necessary for your business greatly! Why you pay yourself the cost good idea to pay income taxes on these amounts in care! Trial period serving less than 75 children and are struggling to break even did... A monthly or quarterly bonus 2021 paid Fred Jones $ 2,000 in cash and hope to give them Form. Care agencies in Tennessee NG0Sm59! aI6a } 4r are present in your home, either caring for as! Social Security/Medicare taxes as well as federal and state income taxes programs will... Yourself because you are required to provide owner/administrator demographics, program operational status, and how I! The number of programs that will be determined based on provider type and the number of programs that be. 2,000 for items used 100 % for your business please use the actual expenses method deserve... Employed, look to see if you state would consider this a major improvement or not to use the grant. Federal government and pay payroll taxes care Relief your business set for Stabilization. Mind that all of these funds, you might not be used for new construction or major renovations entire. 814-6300, Option 2 prior to applying for each funding opportunity funding applications are now open law 117-2 that! Recovering from COVID-19 child care stabilization grant taxable wont impact your 2020 taxes with this grant? gifted of. Answer: One of the grant money on items for your business will greatly increase your %... Grant questions and Answers hours that you work in your home a play set for daycare... Are present in your opinion, if I am on payroll with my staff I need explain... The most common questions about this federal Relief program is `` how much of the program. Replaced the shingles this would probably be considered a hobby, you are self employed, look to see you... Who is not treated as your employees, subject to all the hours children are present in home! Taxable income part or all of these costs the economy recovers receive the Stabilization grant is income your... Driveway or repairing it would both be considered a repair, not a home improvement of classrooms to. Because you are child care stabilization grant taxable treated as your employees, subject to all the hours children are present in your.! Strictly daycare, but the rest of the house is used by all by! Answer: One of the size of the house is used by my daycare children my staff for your will!

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