When the College surveyed allergists back in August 2020, many reported needing and receiving some type of financial assistance. The most popular program was the Paycheck Protection Program (PPP), with 65% of respondents saying they received or expected to receive a PPP loan. The second most popular program was the Health and Human Services (HHS) Provider Relief Fund, at 35%.
Seven months later, there are still many types of financial assistance available to practices currently in need of aid. The recently signed American Rescue Plan (ARP) expands these options even more. Here’s a summary of available options:
- Paycheck Protection Program
The Small Business Administration (SBA) is currently offering PPP loans until March 31, 2021; borrowers who meet certain terms can qualify for full loan forgiveness. Two rounds of PPP loans are available; if you already received a first draw PPP loan, you might be eligible for a second draw PPP loan if you can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020. The ARP provided new funding ($7.25 billion) for the PPP. Dr. Melinda Rathkopf, vice-chair of the Practice Management Committee, said “We were fortunate to receive the PPP early in the pandemic. Though we had to cut back on services for a while for everyone’s safety, we never had to completely shut down and 41 employees kept their jobs.”
- Employee Retention Credit
Allergy practices may have new opportunities to claim the Employee Retention Credit (ERC) thanks to the CARES Act 2.0 and the ARP. One provision that applies retroactively to 2020 allows an employer that received a PPP loan also to be eligible to claim the ERC. In addition, the ERC was extended through Dec. 31, 2021 and the credit percentage was increased from 50% to 70%. The per-employee limitation was increased from $10,000 per year to $10,000 per calendar quarter. To qualify in 2021 for the ERC, the employer’s gross receipts for a calendar quarter must be less than 80% of the same calendar quarter in 2019. Practices should seek further information from their tax consultants to determine whether they qualify for the ERC.
- Provider Relief Fund
The Provider Relief Fund (PRF) isn’t currently accepting applications, but there is approximately $26 billion in unallocated funds that likely will still be distributed. We are waiting for guidance from the Department of Health and Human Services on how this will be allocated. Additionally, the ARP provides funds for rural providers through the PRF.
- Economic Injury Disaster Loan
The SBA is currently accepting new Economic Injury Disaster Loan (EIDL) applications from all qualified small businesses. There are two types of EIDL aid: loans and advances. EIDL Loans must be paid back, but EIDL Advances do not. The ARP provides additional funding for EIDL advances to certain businesses that were unable to obtain original EIDL advances under the CARES Act. These new EIDL advances are not required to be repaid and are nontaxable.
- Credits for Paid Sick and Family Leave
The ARP extends and enhances the refundable payroll tax credits for employers who provide paid sick and family leave under policies established by the Families First Coronavirus Response Act (FFCRA) through Sept. 30, 2021 (these were set to expire on March 31). These credits now include the employer’s share of payroll taxes incurred on creditable wages, in addition to the credit for the wages themselves. Tom Derrico, vice-chair of the Practice Management Committee, said “The paid sick leave credits have been very beneficial to our employees navigating their own COVID-19 exposures as well as those of their families.”
Allergy practices have been through a lot during the past year, but financial relief is still available. Review the options above and consult with your accountant to determine if you’re eligible. The College will keep you updated as these programs change.