Dear Colleagues,
As we work hard to care for our patients during the coronavirus pandemic, we are also challenged to keep our practices running. There are many resources available to help us do this. The TMA website is a particularly rich source of information. I recommend starting with the Practice Viability page. 

Following is a summary of Key COVID19–related Financial Programs that have been brought forth by the federal government. This summary has been developed by Figer & Company Certified Public Accountants. Please use this information with caution and consult with your own tax advisor as it is subject to change due to continued SBA and Treasury Department clarification and guidance.

HHS is immediately distributing $30 billion into the healthcare system– with payments to eligible providers arriving via direct deposit beginning April 10, 2020. These are payments, not loans, to healthcare providers, and will not need to be repaid. More information is available at the HHS website.

  • Recovery rebate checks ($1,200 per Single filer, $2,400 per Married Filing Joint filer, and $500 per dependent child under age 17) are expected in the next couple of weeks. No action is required by individuals to receive these payments.
    • This is an advanced payment of a credit that will be calculated/reconciled on your 2020 tax return

        • Income limits (AGI) apply, at $75,000 for Single, $150,000 for MFJ
          • If between $75,000 and $99,000 Single, you will receive a partial credit. Fully phased out above $99,000
          • If between $150,000 and $198,000 MFJ, you will receive a partial credit. Fully phased out above $198,000
      IRS will look at income reported on your 2018 (or 2019, if filed) tax returns to determine disbursement amount. 

  • Federal unemployment benefits have been increased by $600 per week, for up to four months. Self- employed and independent contractors are now eligible to claim these federal (not state) unemployment benefits.
  • Waives the 10% penalty tax on early retirement account withdrawals (before age 59 1⁄2) for coronavirus- related distributions up to $100,000. Early distributions eligible for three-year repayment window before they are considered taxable income.
  • Temporarily waives the required minimum distribution (RMD) rules for certain retirement accounts for 2020.
  • Provides a $300 above-the-line deduction for 2020 cash contributions to certain public charities.
  • Forgives (and excludes from income) up to $10,000 of unpaid student loans.
  • Creates a new employee retention credit of 50% of wages paid to each employee (capped at $10,000/employee). Credit offsets employer share of FICA.
  • Allows for deferral of employer portion of payroll tax payments (FICA) for wages paid 4/1/20 through 12/31/20. The deferred payments are repaid: 50% by 12/31/21, 50% by 12/31/22. No deferral of employees’ FICA and federal income tax withholding. A taxpayer is not eligible if receiving government assistance from other disaster programs.
Modifies the net operating loss rules, suspends excess business loss limitation rule, and modifies the interest deduction limitation

The bill provides two lending programs (PPP and EIDL) for small and medium-size businesses to obtain disaster relief and allows both to be used but not for the same purpose. 

  • Paycheck Protection Program (PPP): This is an expansion of the existing 7(a) program through SBA-authorized lenders that allows for some forgiveness (expires 6/30/20).
    • Loan program for for-profit and most non-profit businesses with 500 or fewer employees. The borrower must have been in operation on February 15, 2020.
    • Business must certify “injury” from pandemic
    • No collateral or personal guaranty requirements. All SBA loan fees waived.
    • Max loan per employer is 2.5 times the prior 12-month average monthly payroll costs (or $10M, whichever is less)
    • Loan proceeds can be used for normal business expenses – payroll, healthcare payments, retirement benefit payments, rent, utilities, etc. (contract labor excluded).
    • 2-year term at 1% interest rate. Six-month loan payment deferral includes principal/interest.
    • Loan forgiveness for permitted use of funds during first eight weeks (payroll, group healthcare, mortgage interest, debt interest, rent, utilities) after loan is funded.
    • Forgiveness is limited if workforce FTE’s or compensation per employee is significantly reduced after loan is approved. Any amount forgiven is excluded from gross income.
    • Businesses receiving the PPP loan cannot claim the Employee Retention Tax Credit.
  • Economic Injury Disaster Loan (EIDL):
    • Currently allows for emergency loans of up to $2M to assist companies affected by COVID-19.
    • Waives the requirement for personal guarantees on loans under $200K.
    • Waives the requirement that the borrower not be able to obtain credit elsewhere, and provides emergency grants of up to $10K within three days of the borrower filing an application, though the amount of the grant would reduce any loan forgiveness under the PPP.
EIDL recipients cannot use EIDL for the same purpose as the PPP loan, but there is some ambiguity. The EIDL is rolled into the PPP for the forgiveness calculation.

(Employer sick pay and family & medical leave payments to employees, expires 12/31/20)

  • Employers with 500 or fewer workers eligible for government reimbursement (credits against payroll taxes) for amounts paid under this Act (see Department of Labor guidelines attached):
    • Credit for sick leave: depending on reason for leave, credit can be for regular rate of pay (up to $511/day) or 2/3 rate of pay (up to $200/day), per employee, for a maximum ten days each.
    • Credit for family and medical leave: 2/3 of employee’s regular pay rate per day (up to $200) per day per employee up to 10 weeks with max of $10,000 per employee.
  • Combined benefits up to 12 weeks (2 weeks of sick leave followed by up to 10 weeks of family leave if unable to work or telework because of the need to care for their child due to care facility or school closures).
  • Employee must have worked one month to be eligible for family & medical leave.
  • Employer cannot force employee to use other accrued leave first, but employee may elect to use accrued leave (because regular pay rate may be higher than caps noted above).
  • Credit is taken up-front (subtracted from normal payroll tax deposits including employees federal tax withholding). Reconciled on quarterly payroll tax reports beginning with 2020-Q2.
Covers those employees quarantined or isolated under government order unless able to work from home (teleworking), even if employee refuses to work from home. If part-time work for full-time work, leave would be for time unable to work (ex: normal 40-hr employee works part-time for 30 hours, then 10 hours eligible for FMLA pay.) 

(IRS deadlines, payments, etc.)

  • Delays all 4/15/20 federal tax return filing and tax payment deadlines to 7/15/20, including 2020-Q1 ES tax payments. Other IRS filing dates unchanged.
  • No guidance on 2020-Q2 ES payment (due 6/15/20).
  • Suspends payments due between 4/1/20 and 7/15/20 for taxpayers under an existing installment agreement and stops installment agreements from going into default during this period (although interest will continue to accrue on any unpaid balances).
  • Provides additional deadlines and relief for taxpayers re: offers in compromise (OIC)
Allows taxpayers to suspend all payments on accepted OICs until 7/15/20 (although interest will continue to accrue on any unpaid balances).

  • CMS expanded its Accelerated and Advance Payment Program to more Medicare Part A and B providers.
  • Most providers can request up to 100% of their historical Medicare payment for a three-month period.
  • Requests from Texas should be submitted to Novitas Solutions. This expansion is only for the duration of the COVID-19 public health emergency. Refer to the CMS Accelerated and Advance Payment Fact Sheet for more information.

Additional resources: