Last Updated 2/22/2021
Employee Retention Tax Credit Update
Prior to the Taxpayer Certainty and Disaster Tax Relief Act of 2020, those who received PPP loans were automatically disqualified from an employee retention credit (ERC). Section 206(c) of the Taxpayer Certainty and Disaster Tax Relief Act of 2020 changed that, allowing eligible employers to claim ERC, but only on wages that aren't counted as payroll costs for PPP loan forgiveness. For an overview of these changes, click here.
We do want to note for our members that, to date, the IRS hasn't updated any of their FAQ pages on ERC or on stacked relief aid which includes the ERC with additional information on how to calculate credit claimed, nor has Form 7200 been released. We must on that further detail.
If you are looking for the dates when the state of Maryland prohibited elective and nonurgent medical procedures and appointments, the prohibition went into effect at 5 p.m., Tuesday, March 24, 2020 and was released 7:00 a.m., May 7, 2020.
Information on the New Federal COVID Relief Bill
Information received from the Maryland Department of Commerce on the New Federal COVID Relief Bill
Disclaimer – Please talk with your accountant and/or bank to verify or confirm any/all of these points shared.
Changes to the PPP loan in the New Relief Package:
- Allowable expenses have expanded. It was just payroll, mortgage, rent, utilities and now it includes cloud computing, back end systems, supplier goods needed to run the business, retrofit equipment (i.e. outdoor heaters for outdoor dining), and losses due to COVID.
- The same 60/40 rule applies - 60% of PPP money used for payroll costs and 40% for other expenses.
- This expanded allowable expense list applies to “old” PPP and new PPP loans.
- Those who have already gotten a PPP Loan can get a 2nd, but there are conditions – ask your bank. Recipients must have exhausted all funds from the first loan, must demonstrate at least a 25% drop in business due to COVID, and must have less than 300 employees.
- The loan forgiveness timeframe has changed – The covered period is now flexible, from the date you receive the loan (money) to 8 weeks - up to 24 weeks (you decide the time frame between 8-24 weeks).
- Are PPP loans taxable? – NO. AND the IRS can’t limit your deductions for PPP expense items.
- If your loan application was denied the first time, you are welcome to apply again.
- 501c6 (and 501c3) organizations can apply for a PPP loan.
- If a business applied for the Employee Tax Credit, you can now also apply for a PPP loan.
- Max amount of PPP loan is $2 million dollars per business.
- For NAICS 72 businesses (food/hospitality) the average monthly payroll calculations is 3.5 times (instead of 2.5 times).
- Live Venue Grant of $15 billion. Must demonstrate a drop in revenue due to COVID, or up to 45% of your 2019 receipts. Can apply for up to $10 million dollars per business. Can NOT apply for a PPPL and Live Venue grant. Bars with entertainment don’t qualify, but theaters and museums do - those who depend on sale of tickets as a main source of revenue.
- Employee Tax Credit has expanded. January 1, 2021 to June 30, 2021. 70% of wages, up to $10k of employee’s salary (so $7000 per employee), per quarter. So $7kx2 = $14k per employee. Old limit was up to 100 employees and the new limit is less than 500 employees. *Before the end of this year, businesses can apply for the employee tax credit for up to $5k per employee – this is a refundable tax credit. You cannot claim the same employee wages for PPP and Employee tax credit however.
- EIDL is reopening with $20 billion. It includes the same (up to) $10k grant. If you applied before and only got $2k, you can apply again to get the additional $8k. New – the grant amount (up to $10k) will NOT be deducted from your PPPL forgiveness.
- Next Steps – Once relief package is signed by all, the SBA will go to work on creating/updating forms. You apply for a PPP loan at your bank (same as last time) and they will use these forms for PPP loans. The EIDL application will appear on the www.SBA.gov website once it is ready.
Q. If I received a PPP loan, but then closed my business, can I apply for a 2nd loan to pay off the debt?
A. Not likely as the PPP loan is generally not used to pay off debt.
Q. If I received a grant from my county or state, or other source, does that count as revenue when applying for a PPP loan?
A. Unknown at this time. Stay tuned for further clarification to come.
Q. If my PPP loan is less than $150k is it automatically forgiven?
A. No, you must still apply for forgiveness. You will get to use a much simpler 1-page application however - work with your bank on this.
- Unemployment – Pandemic Unemployment Assistance (PUA) has been extended through March 14th. This is an additional $300 a week for those on unemployment.
- Independent contractors - can apply for a PPP loan.
- Rental Assistance - $25 billion set aside to help those behind on rent. This money will go to the states and be distributed by them.
- SBA 7A loan – For those who received a new loan recently OR receive a new 7A loan, the SBA will pay your first 6 months of payments.
Resources for additional information:
HHS Increases and Begins Distributing Over $24 Billion in Phase 3 COVID-19 Provider Relief Funding
December 16, 2020
The Health Resources and Services Administration (HRSA) announced it has completed review of Phase 3 applications from the Provider Relief Fund (PRF) program and will distribute $24.5 billion to over 70,000 providers. Up from the $20 billion originally planned, the addition of another $4.5 billion in funding is being used to satisfy close to 90 percent of each applicant’s reported lost revenues and net change in expenses caused by the coronavirus pandemic in the first half of 2020. The U.S. Department of Health and Human Services (HHS) recognizes this pandemic has upended the health care system and caused significant financial hardships. These resources, along with previous distributions, have provided much needed relief. Payment distribution started today and will continue through January, 2021.
More details are available in the HHS announcement.
Special Notice of CARES Act Fund Disbursement to Health Care Providers
April 10, 2020
The Department of Health and Human Services (HHS) announced today the immediate disbursement of $30 billion to hospitals, physicians, and other health care providers. This disbursement is the first installment of the $100 billion allocated by Congress for the Public Health and Social Services Emergency Fund in the Coronavirus Aid, Relief, and Economics Security (CARES) Act.
Earlier this week, MedChi joined with the American Medical Association and 136 other medical societies to call for the immediate disbursement of funds to health care providers. We are grateful to HHS for answering our call for support.
The disbursements are calculated in direct proportion to health care providers’ total amount of Medicare fee-for-service (FFS) spending in 2019. All facilities and health professionals that billed Medicare FFS in 2019 are eligible for the funds. These funds are grants that do not have to be repaid. Within 30 days of receiving the payment, providers must sign an attestation confirming receipt of the funds and agreeing to the terms and conditions of payment. The portal for signing the attestation will be open the week of April 13, 2020 and will be linked from hhs.gov/providerrelief.
More details are available in the HHS announcement.
MedChi will continue to advocate for economic relief for physicians and health care facilities. We have been promised an announcement from CareFirst, Maryland’s largest carrier, sometime in the next week. We applaud Medical Mutual’s pandemic credit and payment date extension announced earlier this week. And we continue to pressure Medicaid for additional relief.
If you need assistance with economic and business issues, please reach out to MedChi today. We can help answer questions on federal and state loans and grants and help you to understand your options in this difficult time.
MedChi Practice Reopening Toolkit - Updated May 22, 2020
- MedChi Sample Self-Certification for Resumption of Non-Emergent Care During the National Coronavirus Public Health Emergency - Updated June 3, 2020
- February 21, 2021 - Greater Washington Association of Physicians of Indian Heritage (GWAPI) Meeting Slides
- MedChi CEO, Gene Ransom, recently gave an overview of the Second Round of PPP and other business programs to GAWPI here are those slides, that were developed with help from SBA
- May 8, 2020 - Payroll Protection Program: What You Need to Know About Loan Forgiveness
- April 16, 2020 - MedChi Sign on Letter to Governor Hogan, RE: Legal Protections for Health Care Practitioners
- April 15, 2020 - MedChi Sign on Letter with AMA and Undersigned to Dear Speaker Pelosi, Leader McConnell, Leader McCarthy, and Leader Schumer, RE: protect patient access to care by preserving the viability of physician practices as part of the nation’s essential health care system
- April 7, 2020 - Letter to Governor Larry Hogan, RE: COVID-19 Financial Assistance - Grant Program
- April 3, 2020 - COVID19 – Federal Payroll Protection Program and Disaster Grant and Loan Programs
- March 24, 2020 - COVID and Your Business FAQ's
- CARES Act Provider Relief Fund: For Providers
- Reporting Instructions on Use of Funds
- Cares Act Provider Relief Fund Reporting Requirements and Auditing
- CARES Act Provider Relief Fund Frequently Asked Questions
- September 19, 2020 - Post-Payment Notice of Reporting Requirements
- July 31, 2020 - HHS Extends Application Deadline for Medicaid Providers and Plans to Reopen Portal to Certain Medicare Providers
- July 20, 2020 - General and Targeted Distribution Post-Payment Notice of Reporting Requirements
- July 20, 2020 - Medicaid and Children’s Health Insurance Program (CHIP) Distribution Update
In June, HHS announced the opening of the application period and plans to distribute approximately $15 billion to eligible providers that participate in state Medicaid and CHIP programs who had not yet received a payment from the $50 billion General Distribution. Since the announcement on June 9, HHS has hosted a number of webinars targeted at providers and provider organizations to answer questions and assist those eligible through the application process. A fact sheet - PDF explaining the application process has also been created to address frequently asked questions. HHS is continuing to work with provider organizations, congressional, state and local leaders to get the word out about this program. To ensure eligible Medicaid and CHIP providers, including dentists, have the opportunity to apply for a funding distribution, the deadline to apply has been extended to August 3, 2020.
- June 2020 - HHS Medicaid Terms and Conditions Medicaid Relief Fund
- May 15, 2020 - Revised FAQs on the Provider Relief Fund General Distribution Portal
- April 29, 2020 - Summary for HRSA COVID-19 Claims Reimbursement to Health Care Providers and Facilities for Testing and Treatment of the Uninsured
- April 25, 2020 - Frequently Asked Questions regarding the second tranche of disbursement of the CARES Act Provider Relief Fund
- April 9, 2020 - Relief Fund Payment Terms and Conditions
- April 6, 2020 - NOTE: As of 5 p.m. on April 6, Commerce is no longer accepting new applications for its COVID-19 Relief Grant and Loan Programs. All applications that have been submitted are currently being reviewed in the order received. If you have already started an application in the program system, it must be completed and submitted by 5 p.m. on April 7, 2020 in order to be considered. Read more here.
- March 30, 2020 - Maryland Business Express: Coronavirus (COVID-19) Information for Businesses
- PPP 2.0: Summary & Update on the Omnibus Government and COVID-19 Relief Funding Bill YouTube Video
This program provides a brief summary of the numerous COVID-19 support and relief programs that have been provided to date, as well as important updates resulting from the recent omnibus government spending and coronavirus relief package, which included an additional $900 billion for COVID-19 relief.
We also discuss updates about first- and second-draw applications under the Paycheck Protection Program (note that loan portals opened again on January 15th and January 19th, depending on the size of lender’s assets), the latest guidance on PPP loan forgiveness and taxation, and relevant highlights from the omnibus spending package.
MCMS thanks David Shapiro and Scott Mirsky from The Law Firm of Paley Rothman in Bethesda for this presentation.
- COVID-19: Practice Reopening Toolkit
- March 31, 2020 - Memo RE: Information for Businesses Related to COVID-19
In response to the COVID-19 pandemic, Maryland and the Federal Government have developed several financial programs to assist businesses during this uncertain time. To better assist our clients in navigating these programs, we have put together a compilation of websites with information on available programs. For many of these programs, such as those under the federal CARES (Coronavirus Aid, Relief, and Economic Security) Act, additional guidance should be released within the next 30 days.
- The Small Business Owner’s Guide to the CARES Act
The programs and initiatives in the Coronavirus Aid, Relief, and Economic Security (CARES) Act that was passed by Congress is intended to assist business owners with whatever needs they have right now. When implemented, there will be many new resources available for small businesses, as well as certain non-profits and other employers. This guide provides information about the major programs and initiatives that will soon be available from the Small Business Administration (SBA) to address these needs, as well as some additional tax provisions that are outside the scope of SBA.