Category: COVID-19

PPP#1 Loans

1. Covered Expenses paid with your PPP#1 Loan will now be tax deductible for money already received
2. PPP#1 funds will not be taxable income, which means the expenses paid with the PPP#1 funds will be tax deductible
3. The New Tax Bill, that President Trump signed on Sunday, December 27, 2020, repeals the requirement of deducting the EIDL advance from the PPP forgiveness amount
4. The EIDL advance up to $10,000 per Practice (or $1,000 per Employee), will not have to be repaid.
5. The New Tax Bill simplifies the forgiveness process on PPP loans of $150,000 or less. (We have yet to see what that new process or form will be). Please wait to apply for forgiveness, for the Banks are still waiting on updated guidance from the SBA and the US Treasury. Please remember, you MUST file for forgiveness, 10 Months after your 24 week period is up. If you do not file for forgiveness, your PPP Loan , will become a two (2) year Loan payable at 1% interest.

PPP#2 – Second Round of Funding

1. The SBA will have 10 days (after the New Tax Bill is enacted) to establish regulations for the next round of PPP#2 funding. Thus, please keep in mind that the highlights below are terms we anticipate being signed into law; however, the SBA’s regulations may alter this.
2. $284.5 Billion in funds will be available through the next PPP#2 loans.
3. Paycheck Protection Program (PPP#2) offered through March 31, 2021.
4. Is your Practice eligible for the second round of funding (PPP#2)? Businesses with less than 300 employees who have had a 25% or greater reduction in collections (i.e., gross receipts) in any ONE quarter of 2020, when compared to that same quarter of 2019. For example, let’s assume you collected $100,000 in April 2019, $1000,000 in May 2019 and $100,000 in June 2019 for a total of $300,000 for Q2 of 2019. We will need to compare that to the same quarter of 2020 (April, May & June 2020) to determine if you have a reduction of Collections that are 25% or better. I sense most of you will, since you were closed a good portion of Q2 2020. If so, we will then need further guidance from both the SBA and the US Treasury, as to what criteria will be needed to be satisfied to meet the new requirements of the PPP#2.
5. I will be working with the ADA in January 2021 as the PPP#2 develops and will be reporting back to you at that time. The ADA has been “off the charts” supporting Dentistry throughout this process. Your membership with the ADA is working for you!!  

Other Key Tax Provisions for Dentistry

1. Employee Retention Tax Credit: Extended through July 1, 2021; We are waiting on further guidance as to how this work in 2021.
2. COVID-Related Pay Tax Credits: Extended to March 31, 2021. These are the refundable payroll tax credits for Emergency Paid Leave and Emergency Family Medical Leave Pay that were set to expire on December 31. Please e mail Diane Nelson, CPA, MST at DNelson@schiffcpa.com for further guidance and help if needed.
3. Charitable Giving Incentive Extended: One-year extension of the $300 “above the line deduction,” meaning you can take this deduction even if you are not using itemizing your deductions on your individual income tax return. Is now $600 if Married Filing Joint (MFJ). Please see note below on giving to the ALS Clinic at Johns Hopkins Hospital in Baltimore, Maryland. Thank you!
4. Flexible Spending Arrangement (FSA) Relief: Allows individuals to carry over any unused health and dependent care FSA benefits from 2020 into 2021 plan year.

Department of Health & Human Services (HHS)

Many of you received Phase 2 funding from the Department of Health & Human Services. Some of you, even received funding from HHS recently within their Phase 3 funding. As of today, we will have to report to the Department of HHS in January 2021 and again in July 2021 as to how you used these proceeds and what monies were spent on such. As soon as January 2021 begins for Small Business, the Department of HHS will be supplying us with further guidance as to what documents will be needed in order to gain full forgiveness. As of now, please save all documentation (Invoices, Canceled Checks and Credit Card Receipts) for any items you purchased that would qualify for PPE Equipment & Supplies. We will be sending out an updated e-mail with instructions, as soon as the requirements become apparent to us.  

2020 4th Quarter Estimated Payments due , January 15, 2021

During the last Quarter of 2020, we have met with most of our clients. During your 2020 year end meeting, we presented to you, two (2) scenarios with respect to your Tax Position as of December 31, 2020. Please review such, and please pay the 2020 4^th Quarter Estimate based on the Column of your Tax Projection that states the PPP Loan will not be taxable. If you have any questions, please contact your Schiff Team Member on Monday, January 4, 2021.

Maryland – LLC’s , Sub S Corporations – Maryland MD 510 Payments due TODAY, December 31, 2020

Recently, the State of Maryland changed their tax laws as it relates, to the State of Maryland Taxes due from Pass Through entities, such as a Maryland LLC, Maryland Partnership and a Maryland Subchapter S Corporation. The new Tax Law, will allow you to pay your State Taxes through your entity, and receive a tax deduction. Please be sure to pay this Tax with Maryland Tax Form 510D. https://www.marylandtaxes.gov/forms/20_forms/510D.pdf. Please pay today, December 31, 2020, if you have not done so.

This only applies to Maryland Partnerships and Corporations, NOT SOLE PROPIETORSHIPS taxed as an LLC!

ALS Clinic at Johns Hopkins Hospital Baltimore – Cindy Schiff

As you have gotten to know Cindy, life was not about her, but about mankind. There will be no better way to honor her life with a contribution to research of the horrible disease of ALS. Contributions in Cindy’s name can be mail to:

Hopkins ALS Clinical & Education Fund
c/o Lora Clawson, CRNP
JHOPC – Suite 5070A 
601 North Caroline Street
Baltimore MD 21287

Or , you can pay on line at >>

https://secure.jhu.edu/form/als?fbclid=IwAR3RvQ3xmUM0vdcXfrcxvOI1XF7h1k5j58ARe8iWPvqtUx38lWl6lyV4QfM

Special “THANKS” to each of you, that have made a Contribution to the ALS Clinic at Johns Hopkins Hospital in Baltimore in honor of Cindy’s Name. I am so appreciative of each you and your generosity. The ALS Clinic in Baltimore, is amazed at the abundance of love as well!  My heart is filled with amazing warmth & comfort….Thank you!

ADCPA PODCAST on PPP Funds & Cindy Schiff & the ADCPA

As most of you know, the ADCPA produces a weekly PODCAST on Dental Practice Management as well as Dental Finance. The December 16^th PODCAST was on >>>What Dentists Need to do to Qualify for a New PPP Loan in the Next Round of Stimulus as well as was dedicated to Cindy & her life. If you would like to listen to this Podcast, please click on the Hyper Link below. I am grateful for Art Wiederman, CPA (ADCPA Los Angeles CA) for dedicating the PODCAST to Cindy & her life.

https://blubrry.com/art_of_dental_finance/71634748/what-dentists-need-to-do-to-qualify-for-a-new-ppp-loan-in-the-next-round-of-stimulus/

This morning the text of the new Additional Coronavirus Response and Relief (ACRR) legislation was released. If the legislation is passed by Congress and signed into law, it will include the following items:

1.  PPP Deductibility – Expenses used to obtain loan forgiveness will be deductible.

2.  EIDL Grant taxability – The EIDL Grant (up to $10,000 received in April 2020) will be tax free and related expenses will be deductible.

3.  EIDL Grant impact – The EIDL Grant will no longer reduce PPP loan forgiveness. Under the CARES Act, if a practice received a $100,000 PPP and $10,000 EIDL, it would be eligible for $90,000 forgiveness and be left with a $10,000 PPP loan. That adjustment is being eliminated allowing for the potential to obtain full forgiveness.

4.  Simplified application – PPP loans of under $150,000 will be eligible for a one page simplified forgiveness application but still must retain documentation and meet the requirements of the program.

5.  2^nd Round PPP – If your practice incurred a 25% or greater reduction in collections in any 2020 calendar quarter compared to 2019, it may be eligible for a 2^nd PPP loan. Most practices should have incurred such a reduction for the 2^nd quarter that includes April – June 2020. We need additional time and guidance to determine if there will be other limitations.

6.  Stimulus payments – Taxpayers with under $150,000 adjusted gross income (married filing joint) or $75,000 (single) will be eligible for an additional $600 stimulus payment or 2020 tax credit.

7.  Meals – Business meals provided by a restaurant paid in 2021 and 2022 will be 100% deductible but still require normal documentation including the business purpose, who attended, and what business was discussed. There is no change to business meals paid in 2020.

It is important to note that even if this legislation is passed without changes, it will take the Treasury Department, SBA, and IRS a few weeks or months to clarify some details. 

This is GREAT NEWS to all business owners! A early Christmas gift before Christmas!  :>)

I wanted to reach out to offer some insight into the HHS Phase III Funding Application that I emailed you on Friday October 23, 2020.

This 3^rd round of HHS funding will first go to Dental Practices who have not received funding from HHS within the previous two (2) HHS phases. This would include Start Up Dental Practices as well as those Practices that were rejected or did not apply for Phase 1 or Phase 2 Funding. After all applications have been processed AND all entities who qualified for the 2% of net 2019 collection payment have in fact received their payments, there is a possibility of additional payments from HHS if there are monies left over. There are no guarantees.

At this time we do not know how much funding, if any, will be left over to be distributed to practices that have already received their 2% of Net 2019 Collections payment from HHS. We will have to wait and see.

If you are in need of your P & L for Q1 2020, Q2 2020 and/or Q1 2019 and/or Q1 2019, please reach out to your Schiff Team Member. We can also supply you with your 2019 Income Tax Return as well.

We are receiving a lot of inquiries with respect to “VA Dentists Newly Eligible to Apply for up to $100,000 from Rebuild VA Grants”. Please see the following email:
https://schiffcpa.com/wp-content/uploads/2020/11/Email.pdf

It is our opinion you should apply for these Grants. Please note, these GRANTS are TAXABLE

If you receive the Grant, it can be used for any of the following:

• Payroll support including employee salaries, paid sick leave, medical leave, or family leave, and costs associated with the continuation of group health care benefits during those periods of leave
• Mortgage Payments
  Rental or Lease Payments
• Eligible Utilities:  Electricity, Gas, Water/Sewer, Telephone and Internet service
• Principal and Interest Payments for business loans incurred prior to, or during the COVID-19 emergency
• COVID Related Expenses – (applicants who received CARES Act funds are not eligible for reimbursement of these expenses under the Rebuild VA Grant)  (An example of this would be if you received the HHS Grant)

Here is a complete list of documents needed along with the required documentation:
https://www.governor.virginia.gov/media/governorvirginiagov/governor-of-virginia/rebuildva/RebuildVA-Business-Doc-Requirements_v3.pdf

Examples of Documentation – W-9, Business Income Tax Returns, Most recent Virginia Employment Commission Quarterly Report:
https://www.vec.virginia.gov/employers/VEC-FC-2120

PLEASE NOTE: You will need a DUNS NUMBER for the Completion of the W-9. If you do not have a DUNS Number, you can apply for one here:
https://www.dnb.com/duns-number/get-a-duns.html

Please reach out to your Schiff Team Member if you need any documentation from us (Tax Returns) during the Application Process.

As a reminder, Phase 3 for the Provider Relief Grant (PRG) under the Department of Health and Human Services (HHS) is still available up to 12 Midnight tonight. If you have not applied, please click on this URL:

https://www.hhs.gov/coronavirus/cares-act-provider-relief-fund/for-providers/index.html

If you are in need of Tax Returns and P & L’s, etc. from my office, please reach out to your Schiff Team Member ASAP

Please see this most important message from the ADA with respect to the following major tax issues that will impact your Dental Practice. Here are the highlights:

Giving  additional flexibility for Paycheck Protection Program (PPP) loans by allowing borrowers to:

>> Providing income tax credits to dental practices for the purchase of (PPE) Equipment & supplies
>> Use the Employee Retention Tax Credit (RTC) in conjunction with the PPP Loan Proceeds
>> Allow PPP funds to be used for the purchase PPE Equipment & Supplies.
>> Ability for Dental Practices to have access to additional PPP funds.
>> Deduct expenses paid for with your PPP loan proceeds
>> Allow Provider Relief funding to be non-taxable income

Please take the time to click on the hyperlink below, and reach out to your Congress Representative and have them support the upcoming Covid-19 package.

Dear Dr. Schiff,

We would like to thank you for your continued support and involvement in ADA advocacy efforts. Because of the efforts of you and more than 126,000 of your colleagues, we have been able to make sure Congress included dental concerns in previous legislation on COVID-19 relief.

We are requesting your help again. Congress may take up the next version of a pandemic relief proposal in the coming week. This version will expand on some of the past relief initiatives, as well as other concerns and issues arising from the COVID-19 pandemic. Like we did before, we must ensure dentistry is included in this next legislative package. We are asking Congress to include the following provisions as they move forward with negotiations:

• Providing tax credits to small businesses for the purchase of additional personal protective equipment (PPE) and safety improvements to the office.
• Increasing funding for Medicaid and protecting adult and child Medicaid dental benefits from cuts.
• Providing temporary and targeted liability protection to small businesses that follow applicable public health guidelines during the pandemic.
• Giving additional flexibility for Paycheck Protection Program (PPP) loans by allowing borrowers to:
  • Take advantage of the Employee Retention Tax Credit.
  • Use PPP funds to purchase PPE.
  • Take out additional PPP funds.
  • Apply for PPP loans if they are 501(c)(6) organizations.
  • Deduct expenses paid for with PPP loans.
• Incentivizing health care practitioners to work in health-disadvantaged communities that have been further undermined by COVID-19 by providing tax credits, federal grants, additional student loan repayment, and other incentives.
• Ensuring that Provider Relief funding is not included as taxable income
• Providing supplemental funding designated for the National Institute of Dental and Craniofacial Research (NIDCR) at the National Institutes of Health (NIH) to help the Institute re-launch its research priorities to pre-pandemic levels and help advance their COVID-19 research agenda.
• Investing resources in the public health infrastructure including the Centers for Disease Control and Prevention (CDC) and the Indian Health Service (IHS).

Schiff Client Update – Thursday – August 6, 2020 4:45 PMPlease urge your members of Congress to support these provisions in the upcoming COVID-19 package.

Take Action Now!

Urge Your Members of Congress to Include Dentistry in the Next COVID Package

HHS Application (2% of annual Fee Income 2019)  The new due date for filing is now August 28, 2020 extended from August 3, 2020 and July 24, 2020!

Please note: This HHS Grant Relief program is open to all Dentists. If you apply, you will receive 2% of the annual fee income of your practice after patient refunds that were reported to the IRS for 2019.

HHS expects to distribute $15 billion to eligible Medicaid and CHIP providers. The payment to each provider will be at least 2 percent (2%) of reported gross revenue from patient care; the final amount each provider receives will be determined after the data is submitted, including information about the number of Medicaid patients providers serve. Before applying through the enhanced provider relief portal,  applicants should:

Read the Medicaid Provider Distribution Instructions – PDF*

Download the Medicaid Provider Distribution Application Form – PDF*

Please read the INSTRUCTIONS. Many of you have asked, how do I calculate “lost revenue”? Please take your collections for the period of March and April 2019 and compare them to March and April 2020. This difference will be your lost revenue.

*** All Dental Practices (DE for the 2 digit code) should apply.

Finally, if you do NOT want your annual revenues disclosed to the public, you should NOT apply.

2020 Mid-Year Meetings

Please reach out to us as soon as possible (via e-mail), as our August and September calendars are filling up fast with clients desiring a 2020 Mid-Year Meeting. As a result of the Pandemic, will be hosting all 2020 Mid-Year Meetings via ZOOM. Please keep in mind, as of the date of this writing, your PPP Loan Proceeds will be taxable, because the expenses you paid in order to gain Loan Forgiveness, are not deductible at this time. As a result, you need to plan accordingly for your future tax liabilities. Included in the new proposed tax bill, it to make the expenses paid with your PPP Loan >>>Tax Deductible! That would be simply amazing!!

PPP Loans are available if you have not filed for one yet

The Paycheck Protection Program (PPP) is a loan to provide a direct incentive for dental practices to keep their employees on the payroll. The SBA will forgive loans if all employee retention criteria are met and if the PPP funds are used for “eligible expenses”. The deadline to apply for a Paycheck Protection Program loan is August 8, 2020.

ADA and PPE Tax Credit Update

I am working closely with the ADA and it appears Congress is “liking” the idea of a Tax Credit, for the costs that you have incurred for the acquisition of PPE Equipment and Supplies, from March 2020 through December 31, 2020. As you may recall, a “Tax Credit” is better than a Tax Deduction, for a Tax Credit is a dollar for dollar reduction of your Federal Income Taxes. >>I am fairly confident this will be passed in the new tax bill>>>>fingers crossed!!

In addition to the PPE Tax Credit, Congress will be meeting this week and there is a chance of major changes to the current PPP Programs as we know it. Here are some of the proposed changes, they may occur in the not to distant future:

Providing additional flexibility for the Paycheck Protection Program (PPP) loans by allowing borrowers to:

• Employee Retention Tax Credit …make it available to all PPP Loan Recipients…..currently not available
• Use PPP funds to purchase PPE……currently not available
• Additional PPP funds if your business is down by 50% or more from the same quarter of last year…..currently not available
  • PPP Loans issued will be forgiven without submission of documentation for forgiveness for PPP Loans of $150,000 or less…..currently not available
• Deduct all expenses paid for with the use of the PPP loans…..currently not available

Fingers crossed to all of the above!!!

PPE Equipment & Supplies?

If you are in need of PPE Equipment / Supplies, please click here>   https://www.crazydentalprices.com/schiff/   The 10% Discount Code is SCHIFF10 

For customer service>> Jay Glazer jay@crazydental.com

Overnight, many of you received your 2% Provider Relief Grant (2% from Dept of HHS). Many of you are asking, what or how do I spend these funds?

There aren’t stringent restrictions but officially HHS has stated that the funds must be used for what is outlined below. Also, make sure you are keeping track of the money and not spending HHS funds on expenses they already are attributing to PPP funds.

Same category of expenses is fine, just make sure they aren’t inadvertently using both funds (PPP and HHS) for the exact same thing:

The term “healthcare-related expenses attributable to coronavirus” is a broad term that may cover a range of items and services purchased to prevent, prepare for, and respond to coronavirus, including:

• supplies used to provide healthcare services for possible or actual COVID-19 patients;
• equipment used to provide healthcare services for possible or actual COVID-19 patients;
• workforce training;
• developing and staffing emergency operation centers;
• reporting COVID-19 test results to federal, state, or local governments;
• building or constructing temporary structures to expand capacity for COVID-19 patient care or to provide healthcare services to non-COVID-19 patients in a separate area from where COVID-19 patients are being treated; and
• acquiring additional resources, including facilities, equipment, supplies, healthcare practices, staffing, and technology to expand or preserve care delivery.

Providers may have incurred eligible healthcare-related expenses attributable to coronavirus prior to the date on which they received their payment. Providers can use their Provider Relief Fund payment for such expenses incurred on any date, so long as those expenses were attributable to coronavirus and were used to prevent, prepare for, and respond to coronavirus. HHS expects that it would be highly unusual for providers to have incurred eligible expenses prior to January 1, 2020.

The term “lost revenues that are attributable to coronavirus” means any revenue that you as a healthcare provider (Dentist) lost due to coronavirus. This may include revenue losses associated with fewer patient visits, canceled elective procedures or services, or increased uncompensated care. Providers can use Provider Relief Fund payments to cover any cost that the lost revenue otherwise would have covered, so long as that cost prevents, prepares for, or responds to coronavirus. Thus, these costs do not need to be specific to providing care for possible or actual coronavirus patients, but the lost revenue that the Provider Relief Fund payment covers must have been lost due to coronavirus. HHS encourages the use of funds to cover lost revenue so that providers can respond to the coronavirus public health emergency by maintaining healthcare delivery capacity, such as using Provider Relief Fund payments to cover:

• Employee or contractor payroll
• Employee health insurance
• Rent or mortgage payments
• Equipment lease payments
• Electronic health record licensing fees

You may use any reasonable method of estimating the revenue during March and April 2020 compared to the same period had COVID-19 not appeared. For example, if you have a budget prepared without taking into account the impact of COVID-19, the estimated lost revenue could be the difference between your budgeted revenue and actual revenue. It would also be reasonable to compare the revenues to the same period last year. As you know, Schiff prepares Budget for most if not all clients

All providers receiving Provider Relief Fund payments will be required to comply with the reporting requirements described in the Terms and Conditions and specified in future directions issued by the Secretary. HHS will provide guidance in the future about the type of documentation we expect recipients to submit. Additional guidance will be posted at https://www.hhs.gov/provider-relief/index.html.

Here is the ADA position on the HHS Provider Relief Fund for Dentists. We along with the ADCPA received many calls from our clients about the “balance billing” issue if you were to participate with this grant (relief funds). You will see below, the ADA worked with HHS to resolve this issue. It ONLY becomes an issue if you are treating patients that have been diagnosed with the virus.

You are welcome to SHARE with your friends and colleagues.

Finally, please consider registering for the webinars as listed below. They will be very informative!

As part of the 2.2 Trillion CARES Act signed by the President on March 27, $175 billion was allocated to the CARES Act Provider Relief Fund. This fund was intended to provide funds to healthcare providers to help them fight the COVID-19 virus for their patients. This fund was limited up until recently to physicians, hospitals and other healthcare providers other than dentists. As of last Friday, all Dentists are eligible.

Many of you that are ADA Members received an e-mail from the ADA (see below) this past Friday evening announcing that all Dentists are now eligible for the #175 Billion in HHS Payments. Initially when the program was first introduced, the HHS Program was only for those Dentists providing services to patients that are Medicaid eligible (Please see >> Schiff Client update, June 10, 2020 at 8:00 PM). This is not the case now  as a result of the ADA’s advocacy. This Program is now available for all Dentists. Go ADA!

From my reading of the updates (please see below), it appears a dentist wouldn’t know if they were eligible until they start the application process. You will need your Federal Identification Number (TIN) along with your annual collections.  You are eligible only if your Federal Identification Number matches a list approved by the HHS. There are steps in the FAQs to follow if your TIN is not on the approved list.

The amount of money you receive, if eligible is 2% of Gross Revenue on the most recently file tax return. Note that the funds you receive will be made public so if privacy is a concern to you then you may not want to apply for the Relief Funds. Anyone reading the list will be able to estimate your annual Collections. For example, if you Gross $1 million you are eligible for $20,000. As of now, the funds will be “taxable”. The ADA is lobbying to get these funds to a “non-taxable” state! Stay tuned!

HHS Announces Over $4 Billion in Additional Relief Payments to Healthcare Providers Impacted by the Coronavirus Pandemic

https://www.hhs.gov/about/news/2020/07/10/hhs-announces-over-4-billion-in-additional-relief-payments-to-providers-impacted-by-coronavirus-pandemic.html

The U.S. Department of Health and Human Services (HHS), through the Health Resources and Services Administration (HRSA), is announcing approximately $3 billion in funding to hospitals serving a large percentage of vulnerable populations on thin margins and approximately $1 billion to specialty rural hospitals, urban hospitals with certain rural Medicare designations, and hospitals in small metropolitan areas. HHS is also opening the provider portal to allow dentists to apply for relief.  HHS recognizes the urgent need these vital funds play in supporting safety net providers and those serving large rural populations facing financial devastation catalyzed by the pandemic.

Welcome to the CARES Act Provider Relief Fund Payment Attestation Portal.

 The Department of Health and Human Services (HHS) has announced $175 billion in relief funds, including to hospitals and other healthcare providers on the front lines of the coronavirus response as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the Paycheck Protection Program and Health Care Enhancement Act. This funding, along with additional relief funding outside of the CARES Act, supports healthcare-related expenses or lost revenue attributable to COVID-19 and ensures uninsured Americans can get treatment for COVID-19. This site is open to all providers who want to apply for a Provider Relief Fund payment, regardless of network affiliation or payer contract. HHS is contracting with UnitedHealth Group to facilitate delivery of the funds.

How were dental providers determined to be eligible for this Distribution?  (Added 7/10/2020)

Many dental providers have already successfully applied for funding under the Medicaid-focused General Distribution.  To support payments to dental providers who may not bill Medicare or Medicaid, HHS has developed a curated list of dental practice TINs from third party sources and HHS datasets.  Providers with TINs on the curated list must meet other eligibility requirements including operating in good standing and not be excluded from receiving federal payments.  As a next step, HHS will work with states and its vendors to authenticate dental providers not on the curated list.

How can a dental provider find out if they are on the curated list?  (Added 7/10/2020)

When a dental provider applies, the first step of the application process is to validate that their TIN is on a curated list of known dental providers. HHS will work to validate applicants that are not on that list.  If you are concerned you were not on the curated provider list, please ensure you have an active, verifiable dental provider TIN and submit your information to the Provider Relief Fund application portal.  You will be notified if you are permitted to continue your application for PRF payment.  Any eligible dental providers not on the curated list will undergo additional review and if validated will be permitted to apply for funding.

To be eligible, a dental provider must meet all of the following requirements:

1. Must not have received payment from the initial $50 billion Medicare-focused General Distribution
2. Must not have received payment from the $15 billion Medicaid and CHIP Distribution
3. Must have either (i) filed a federal income tax return for fiscal years 2017, 2018 or 2019 or (ii) be an entity exempt from the requirement to file a federal income tax return and have no beneficial owner that is required to file a federal income tax return. (e.g. a state-owned hospital or healthcare clinic)
4. Must have provided patient dental care after January 31, 2020
5. Must not have permanently ceased providing patient dental care directly, or indirectly through included subsidiaries
6. If the applicant is an individual, have gross receipts or sales from providing patient dental care reported on Form 1040, Schedule C, Line 1, excluding income reported on a W-2 as a (statutory) employee.

https://www.hhs.gov/coronavirus/cares-act-provider-relief-fund/faqs/dental-distribution/index.html

The terms and conditions to the program.

PLEASE READ THESE CAREFULLY. There are a few of these terms and conditions which need clarification. Below are three of the terms and conditions to carefully review:

1. A) The Recipient certifies that it provides or provided after January 31, 2020 diagnoses, testing, or care for individuals with possible or actual cases of COVID-19
2. B) Recipient is not currently terminated from participation in Medicare or precluded from receiving payment through Medicare Advantage or Part D; is not currently excluded from participation in Medicare, Medicaid, and other Federal health care programs; and does not currently have Medicare billing privileges revoked.
3. C) The Recipient certifies that it will not use the Payment to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse.

https://www.hhs.gov/sites/default/files/terms-and-conditions-medicaid-relief-fund.pdf

Portal to apply for HHS Funds >

 https://www.hhs.gov/coronavirus/cares-act-provider-relief-fund/for-providers/index.html

The documents you will need to upload so you can be prepared when you start the process.

1. Most recent business federal tax return for 2017, 2018 or 2019 (IRS Form #1120S Corporations, IRS Form#1040  Schedule C – LLC’s and Sole Proprietors, IRS Form #1065 for Partnerships / LLC’s). Please e-mail your Schiff Team Member if you need copies of your 2019 Income Tax Return.
2. First Quarter 2020 Form 941, Form 940 Annual Federal Unemployment Tax Return (2019)
3. Applicant’s FTE worksheet https://hhs.gov/sites/default/files/prf-fte-worksheet.xlsx
4. Gross Revenue Worksheet https://hhs.gov/sites/default/files/prf-gross-revenues-worksheet.xlsx

Good luck with the application process! You have until July 24, 2020 to apply. I would start the application process now, in case there are “glitches” during the way!

Tax Due Date 07/15/20 – Individual Income Tax Returns

This coming Wednesday, July 15, 2020, is the due date for your 2019 Individual Income Tax Returns for both Federal and State. This due date was changed from April 15, 2020 to July 15, 2020, due to the Pandemic. Please make sure all taxes are paid by this date. Please make sure if you did not file your tax return by July 15, 2020, we have filed a Tax Extension on your behalf. Please confirm with your Schiff Team Member.

Tax Due Date 07/15/20 – Maryland Personal Property Tax Returns

This coming Wednesday, July 15, 2020, is the due date for your 2020 Maryland Personal property Tax Return. This due date was changed from April 15, 2020 to July 15, 2020, due to the Pandemic. Please make sure you have filed your 2020 Maryland Personal Property Tax Return along with the $300 annual filing fee, if applicable. There are NO extensions for this type of tax return beyond July 15, 2020. The $300 filing fee should be made payable to the State Department of Assessments and Taxation (SDAT).

2020 Mid-Year Meetings

Please reach out to us as soon as possible (via e-mail), as our July, August and September calendars are filing up fast with clients desiring a 2020 Mid-Year Meeting. As a result of the Pandemic, will be hosting all 2020 Mid-Year Meetings via ZOOM.

PPE Tax Credit Update

It appears Congress is “liking” the idea of a Tax Credit, for the costs that you have incurred for the acquisition of PPE Equipment and Supplies, from March 2020 through December 31, 2020. As you may recall, a “Tax Credit” is better than a Tax Deduction, for a Tax Credit is a dollar for dollar reduction of your Federal Income Taxes. If you are in need of PPE Equipment / Supplies, please click here>   https://www.crazydentalprices.com/schiff/

PPP – Paycheck Protection Program Flexibility Act of 2020

On June 5, 2020, the “Flexibility” Act was signed into law. As a result, the covered period has been extended from 8 weeks to 24 weeks. In addition, the Payroll Costs have been reduced from 75% to 60% in order to gain maximum PPP Loan Forgiveness. As a result of the 24 week period, we are encouraging all clients to use the 24 week period as opposed to the 8 week period. Also, you should be able to obtain maximum PPP Loan Forgiveness just accounting for the payroll costs during this new and extended period.

PPE Tax Credits & PPE Equipment & Supplies

The ADA is working hard and encouraging Congress to allow Dental Practices to obtain a “tax credit” up to $25,000 for the cost of PPE. It is my understanding at this time, it will be a dollar for dollar credit. In other words, if you spend $1,000 on PPE, and if this Tax Bill is passed, you will receive a Tax Credit in the amount of $1,000. Speaking of PPE, if you are in need of PPE, please click here>>> https://www.crazydentalprices.com/schiff/    In order to use your Schiff coupon, please place “Schiff10” in the coupon section of your order.

Retention Tax Credit (RTC)

There is a possibility, Congress will revisit this Tax Credit (RTC) in the near future and allow you to take the “Tax Credit, even though you received a PPP Loan. This would be amazing! Why? Because the requirements for the Tax Credit are, your business would have to have suffered a loss, calculated by measuring the 2nd Quarter of 2019 vs. the 2nd Quarter of 2020 Collections. If your collections are down by 50% or more, you would qualify for this tax credit. For example,  Let’s assume you collected $100,000 per month for the months of April 2019, May 2019 and June of 2019 or $300,000 and you compare that to April 2020, May 2020 and June 2020 (Q2 2020) at $150,000 or less, you would qualify for the RTC. If so, the credit will be increased from 50% of the 1st $10,000 in wages per employee to 80%  of such wages, for wages paid during Q2 of 2020. So, as of now, if you received a PPP Loan, you do not qualify for the RTC. However, this could change in the future….please stay tuned!  :>)

Maryland Unemployment Update – You may have this question!

Question – As I understand it, the maximum weekly unemployment benefit for Maryland is $430.00 plus the Federal stimulus of $600.00 a week  Based on the formula, how much can an employee in Maryland earn on a weekly basis without impacting the above?

Answer – The amount a claimant can earn each week depends on a few things. The claimant must be working less than 35 hours per week and earning less than the Regular UI benefit amount.  For instance, if a claimant is eligible for $400 in Regular UI per week, is working 30 hours per week and earned $350 that week, they would still be eligible to receive a partial unemployment check along with the additional $600 in federal stimulus.  However, if the claimant earns more than their Regular UI weekly benefit amount, regardless of the number of hours worked, they are not eligible.  If they are working 35+ hours per week, regardless of their wages earned, they are not eligible.

EIDL Loan Update

As of the date of this writing, please hold onto your EIDL Loan. We will assess the situation this coming Fall. At that time, we will determine if we are going to payoff the EIDL Loan. Borrowers can obtain their EIDL loan payoff information by contacting the SBA Disaster Loan Servicing Center at (800) 736-6048.

Family First Coronavirus Response Act (FFCRA). 

Now that offices are starting to open, I wanted to provide additional guidance on the Family First Coronavirus Response Act (FFCRA).  The ADA lobbied and was successful with the under 50 employee limit. So, if your practice has less than 50 employees, you are exempt from providing the additional 10 weeks of FMLA leave.

However, under FFCRA, employers with under 50 employees are still required to provide their employees with paid sick leave for specified reasons related to COVID-19. This rule will impact most dental practices.

Paid Sick Leave

This leave is available to employees from the time you reopen the office.  The employees did not qualify for leave during the closure of your office due to Covid-19. The Act provides that covered employers must provide the following to all employees:

• Two weeks (up to 80 hours) of paid sick leave at the employee’s regular rate of pay where the employee is unable to work because the employee is quarantined (pursuant to Federal, State, or local government order or advice of a health care provider), and/or experiencing COVID-19 symptoms and seeking a medical diagnosis; or
• Two weeks (up to 80 hours) of paid sick leave at two-thirds (2/3) the employee’s regular rate of pay because the employee is unable to work because of a bona fide need to care for an individual subject to quarantine (pursuant to Federal, State, or local government order or advice of a health care provider), or care for a child (under 18 years of age) whose school or child care provider is closed or unavailable for reasons related to COVID-19, and/or the employee is experiencing a substantially similar condition as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of the Treasury and Labor.

While full-time employees may receive up to 80 hours of paid sick leave (if they work 40 hours per week), part-time employees are entitled to a pro-rata number of hours based on hours worked over two workweeks. If, for example, a part-time employee works 15 hours per week, this team member would be eligible for up to 30 hours of paid sick leave.

Qualifying Reasons for Leave for paid sick time:

Here are the qualifying reasons for paid sick leave. Under the FFCRA, an employee qualifies for paid sick time if the employee is unable to work (or unable to telework) due to a need for leave because the employee:

1. is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
2. has been advised by a health care provider to self-quarantine related to COVID-19;
3. is experiencing COVID-19 symptoms and is seeking a medical diagnosis;
4. is caring for an individual subject to an order described in (1) or self-quarantine as described in (2);
5. is caring for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19.

There are dollar limits on how much can be paid for sick leave.  For reasons 1, 2, and 3 (above), the daily rate of pay is capped at $511. The two-week cap is $5,111 (10 days).  For reasons 4 and 5 (above), the daily cap is $200, and the total cap for the two-week period of leave is $2,000 (10 days). If, for example, you have a full-time employee who is unable to work because she is caring for a child due to a COVID-related daycare closure (reason 5), he/she is eligible for paid sick leave of up to $200 per day and $2,000 over the two-week period.

Can an Employee Take Intermittent Leave?

The Act does not permit intermittent leave unless there is a written agreement between the employer and employee. Intermittent leave can only be used for childcare (reason #5 above).  For example, you may have an employee who can return to work, but she can only work reduced hours because childcare is unavailable for reasons related to COVID-19. If the employer and employee have a written agreement that permits intermittent leave for this situation, the employee can receive paid sick leave for the missed hours of work.

What to Do When an Employee Requests Leave

If you have an employee request leave under FFCRA, we recommend you have them fill out a “leave form” located here >https://mcusercontent.com/0cd89d595f6ac2e6699fc9924/files/7d5b7b14-6002-4c7f-9ead-fc601c3c4f36/FFRCA_Leave_Request_Form.pdf

Payroll Tax Credits Offset the Cost

Covered employers qualify for dollar-for-dollar reimbursement through payroll tax credits for all qualifying wages paid under FFCRA. Qualifying wages are those paid to an employee who takes leave under the Act for a qualifying reason, up to the appropriate per diem and aggregate payment caps mentioned previously. Applicable tax credits also extend to amounts paid or incurred to maintain health insurance coverage. When reporting payroll to your payroll provider (ADP Payroll Services), please make sure to specify hours for FFCRA so they have that information for the tax credit.

Also, if you have not already done so, you should post a notice in your office regarding FFCRA. Here is the notice >https://mcusercontent.com/0cd89d595f6ac2e6699fc9924/files/78143208-5f6b-4084-909e-5f5d7e83ae60/FFCRA_Poster_WH1422_Non_Federal.01.pdf

Finally, this is my understanding of the Family First Coronavirus Response Act (FFCRA). I would suggest you consult with an HR Attorney for further guidance. If you need a referral for an HR Attorney, please e-mail us.

Yesterday, at approximate 7:00 PM EST, the SENATE approved HR7010. We are expecting President Trump to sign the Bill today.

Here are the highlights of HR7010, Changes to the Small Business PPP Loan Programs

Below is a summary of the changes to the Small Business PPP Loan Program. These modifications to the program require a new strategy but provide significant flexibility for a practice to reopen and rehire its employees and still be able to obtain maximum PPP Loan forgiveness. It is very important to realize that this will require a new round of guidance to be issued by the Treasury and SBA but provides time for them to issue updated information we will need, due to the extension of the program from 8 weeks to 24 weeks.

 Changes to the PPP loan program:

1)  8 week covered period extended to 24 weeks

Practice tip: The PPP loan was based on 2.5 months, approximately 11 weeks, of payroll and you now have 24 weeks to spend it. This eliminates most of the challenges of the program and allows employees to be rehired when the practice is ready to open up.

2)  75% rule reduced to 60%

Practice tip: Due to the 24 week covered period, the new 60% rule should not be a problem. We are recommending that you spend 100% of the loan amount on payroll over the 24 weeks as that will make the Loan Forgiveness application process go much easier, because you will only need to attach payroll reports to support your forgiveness. However, if you spend less than 60% of the loan on payroll, you will have $0 (NONE) “no” loan forgiveness which is a drastic change from the previous 75% rule.  So the takeaway here is, please spend at least 60% or more of your PPP Funds on payroll, so you can avoid this trap.

3)  Rehire date moved from 6/30/20 to 12/31/20

Practice tip: Your practice now has until 12/31/20 to rehire employees back to the 2/15/20 level.

4)  Required FTE goal for the rehire exemption is reduced if you are unable to rehire employees or business has declined due to HHS, CDC, or OSHA requirements regarding COVID-19

Practice tip: Continue to plan on rehiring your employees back by December 31, 2020. However, if guidelines (HHS, CDC and / or OSHA) are issued that restrict the number of employees you may have in the office, this should give the practice flexibility in adjusting staffing levels to a new normal. This exception is new and we will need new guidance to clarify it.

5)  New PPP loans will have a minimum maturity of 5 years

Practice tip: The goal of the program has shifted back to trying to get 100% forgiveness. However if you do not obtain this, we believe you will need to contact your bank to modify the terms to the allowable 5 years. We recommend trying to avoid doing this unless absolutely necessary. Current PPP Loans will mature over the original 2 year period.

Indirect changes to the PPP loan program:

1)  We still don’t know about:

• payments to related parties
• 2019 retirement plan contributions
• misc. other payments but they may not matter.

2)  We assume the $15,385 per individual payroll limit will be increased to $46,154 but will need confirmation from the SBA. The $46,154 is the product of $100,000 / 52 weeks x 24 weeks = $46,154. We will need to confirm this.

3)  As we predicted, the Original SBA Loan forgiveness application will be completely changed, as a result of the above changes.

4)  Although utilities, health insurance, SUTA, and other small costs are still eligible, they become less important. Rather than worry about tracking small receipts (invoices / leases / canceled checks) , we are recommending focusing on the big items that are easy to show to the lender that will support the forgiveness application. Examples would be >>> payroll and rent.

5)  Due to the December 31, 2020 rehire date, practices typically won’t be filing forgiveness applications until January 2021 at the earliest.

Example of 24 Weeks

Out of all of our clients, the earliest a client received their PPP Funds was on April 13, 2020.

So, for example, if you received your PPP Loan proceeds on April 13, 2020, your 24 weeks began on April 13^th and will end on September 28, 2020. This will be your “covered period” in order to meet the 60% / 40% Test as outlined above.

Maryland Unemployment Issues

If you need any additional help, for…….

Your own unemployment claims, please call 410-949-0022 or email     ui.inquiry@maryland.gov.

Employer related questions (not concerning your own claims) please email   dluisides‑dllr@maryland.gov

Please e-mail us any questions you may have. Hopefully, these are the final changes to the PPP Process, but as we have seen, it could change again!

We are here for you!
Please stay well!
My best to all,
Allen

CARES ACT – Paycheck Protection Program Flexibility Act of 2020

Today, the SENATE will be voting on the major changes to the CARES ACT, especially within the PPP Loan process. Here are the major changes as we see them as of today. Please keep in mind, they are proposed and they have NOT passed as of now.

• 75% / 25% current PPP Loan requirements to change to 60% to 40%
• 8 week covered period could change to as many as 24 weeks, to 24 weeks or December 31, 2020, whichever is earlier
• The June 30, 2020 rehire date could be changed to December 31, 2020
• Expanding the two (2) year repayment of the PPP Loan to five (5) years
• Allowing borrowers who receive the PPP Loan Forgiveness to also defer payroll taxes

Charging for PPE Equipment and Supplies

I have been actively involved with the MSDA, especially since their Friday e-mail of last week to its members over the issue, “Can you charge a Patient a PPE Fee”? It is my understanding you can only have “one fee schedule”. What this means is, you must charge all patients the same whether they are an insurance based patient or a fee for service patient. Some of you are charging a separate “PPE Fee”. It is my understanding, the PPE Fee varies between $15 to $25 a patient visit. This is your choice. I would recommend you just do a fee increase at this time, and not show the “PPE Fee”. By doing so, you can start to capture the new PPE costs that you are incurring as a result of the Covid-19 precautions.

As far as Dental Insurance is concerned, you can bill the Insurance Company for the PPE Fee. It is their choice as to whether they choose to reimburse you. If you practice like this, it is also my understanding you should charge the same PPE Fee to a FFS patient as well, thus only having one fee schedule.

Further and from my understanding, recently a Maryland Patient went to the Maryland Attorney General (Consumer Protection Division) and filed a complaint about a Maryland Dentist charging this PPE Fee, even though the Patient was an Insurance Based Patient. This is potentially a violation of your Dental Insurance Contract along with a violation of Maryland Consumer Protection laws, so my suggestion is, you should cease this practice immediately to further limit any liability you may have. This is true for any Medicaid Patients you are seeing along with any HMO Patients.

My advice, please consult with your Attorney for further guidance on this issue. Also , please reach out to Greg Buckler greg@msda.com , Executive Director of the MSDA for further guidance.

Maryland Unemployment Issues

I hope most of you have resolved your Maryland Unemployment issues. If you need any additional help, please reach out to

Your own unemployment claims, please call 410-949-0022 or email     ui.inquiry@maryland.gov.

Employer related questions (not concerning your own claims) please email      dluisides@maryland.gov.

2020 Schiff Client Mid-Year Meetings

As many of you are opening your offices and getting back to the “new normal”, we wanted to reach out to you about your 2020 mid-year consulting meetings.

This year we would like to schedule meetings upon your request. With the many challenges you have been faced with, we thought this would be most appropriate.

We can meet via ZOOM or in person, if the situation is safe for everyone. We are estimating 1.0 to 1.5 Hours per meeting. This year will be more challenging for Tax Planning due to the fact, we are still uncertain if the Internal Revenue Service (IRS) will change its position with respect to the expenses we are paying with our PPP Funds. Currently they are non-deductible. We are hoping Congress will put the necessary pressure on the IRS and reverse its decision.

Please contact your Schiff Team member if you would like to schedule a meeting and we will make it happen.

2020 Quarterly Tax Vouchers – 2020 Q1 and Q2

As a reminder, the 1^st Quarter and 2^nd Quarter Tax Vouchers are now due as of July 15, 2020. Please contact your Schiff Team Member if you need any guidance on these payments.

2019 Individual Tax Preparation

Also, for those of you that are still compiling your 2019 Tax Data, please send to us as soon as possible, so we can get started on its preparation. As a reminder, the 2019 Individual Tax Returns are now due July 15, 2020.

PNC Bank – SCAM UPDATE: Tax-related scams and government stimulus checks

As initially predicted, unfortunately, there are current scams over the Government issued “Stimulus Checks”. Please be careful with text messages, e-mails and phone calls. The IRS only communicates via US Mail and not through and of these other mediums. Please read PNC Bank’s detailed e-mail here. It is very informative.

Employee’s hazard pay and Bonuses – Good News here!

Employee’s hazard pay and bonuses are eligible for PPP loan forgiveness. There is no guidance as to the amounts at this time. Please keep in mind, if the employee salary is already at $100,000+ annualized, the bonus paid to this employee will not help with Loan Forgiveness.

Retirement or health insurance contributions

No additional PPP Loan Forgiveness for retirement or health insurance contributions for self-employed individuals, including Schedule C filers and general partners. Your PPP Loan Forgiveness is limited to the $100,000 annual computation.

Payroll Costs Eligible for PPP Loan Forgiveness

When must payroll costs be incurred and/or paid to be eligible for forgiveness?

Payroll costs paid or incurred during the eight consecutive week (56 days) covered period are eligible for PPP Loan Forgiveness.  You can choose one of two periods:

1. the date you received your PPP loan proceeds from your Bank (i.e., the start of the covered period);or
2. the first day of your first payroll cycle in the covered period (the “alternative payroll covered period”).

Example:  You compensate your employees on a  bi-weekly payroll basis (every other week).  Let’s assume your eight-week covered period begins on June 1 and ends on July 26.  The 1^st day of your first payroll cycle that starts in the covered period is June 7. You may elect an alternative payroll covered period for payroll cost purposes that starts on June 7 and ends 55 days later (for a total of 56 days) on August 1.  Payroll costs paid during this alternative payroll covered period are eligible for forgiveness.  Also, payroll costs incurred during this alternative payroll covered period are eligible for forgiveness as long as they are paid on or before the first regular payroll date occurring after August 1.

Nonpayroll Costs Eligible for PPP Loan Forgiveness

When must nonpayroll costs (Rent, Utilities & Mortgage Interest) be incurred and /or paid to be eligible for forgiveness?

A nonpayroll cost is eligible for forgiveness if it was:

1. paid during the covered period; or
2. incurred during the covered period and paid on or before the next regular billing date, even if the billing date is after the covered period.

Example:  Let’s assume your covered period begins on June 1 and ends on July 26.  You pay your May and June electricity bill during the covered period and you pay your July electricity bill on August 10, which is the next regular billing date.  You may seek loan forgiveness for your May and June electricity bills, because they were paid during the covered period.  In addition, you may seek loan forgiveness for the portion of your July electricity bill through July 26 (the end of the covered period), because it was incurred during the covered period and paid on the next regular billing date. Please maintain copies of invoices and canceled checks so we will have them when we file for PPP Loan Forgiveness.

Will a borrower’s loan forgiveness amount be reduced if the borrower laid-off or reduced the hours of an employee, then offered to rehire the same employee for the same salary and same number of hours, or restore the reduction in hours, but the employee declined the offer? 

No.  If you offered to rehire your employees, you are generally exempt from the PPP Loan Forgiveness reduction calculation. Here are the requirements:

1. you made a good faith, written offer to rehire such employee (or, if applicable, restore the reduced hours of such employee) during the covered period or the alternative payroll covered period;
2. the offer was for the same salary or wages and same number of hours as earned by such employee in the last pay period prior to the separation or reduction in hours;

iii. the offer was rejected by such employee;

1. the borrower has maintained records documenting the offer and its rejection; and
2. the borrower informed the applicable state unemployment insurance office of such employee’s rejected offer of reemployment within 30 days of the employee’s rejection of the offer. Further information regarding how you will report information concerning rejected rehire offers to state unemployment insurance offices will be provided on SBA’s website.

Will a borrower’s loan forgiveness amount be reduced if an employee is fired for cause, voluntarily resigns, or voluntarily requests a schedule reduction?

No.  When an employee of the borrower is fired for cause, voluntarily resigns, or voluntarily requests a reduced schedule during the covered period or the alternative payroll covered period , the client may count such employee at the same full-time equivalency level before the FTE reduction event.

Loan Forgiveness – Documentation Requirements What must borrowers submit for forgiveness of their PPP loans?

The loan forgiveness application form details the documentation requirements; specifically, documentation each borrower must submit with its Loan Forgiveness Application (SBA Form #3508), documentation each borrower is required to maintain and make available upon request, and documentation each borrower may voluntarily submit with its loan forgiveness application. Please be sure to maintain all payroll reports, along with invoices and canceled checks during your covered period.

When is your SBA Loan Forgiveness Form Due?

You have until October 31, 2020 to file your SBA Loan Forgiveness Form. The lender has 60 days from receipt of a complete application to issue a decision to SBA.

PPE Equipment ?

If you are in need of PPE Equipment and supplies, please click here >>  www.crazydentalprices.com

You will receive a 10% Discount if you use the Code Word Schiff10

If you need personal service, please contact Jay Glazer at jay@crazydental.com, or 410-205-8033

Employee’s hazard pay and Bonuses – Good News here!

Employee’s hazard pay and bonuses are eligible for PPP loan forgiveness. There is no guidance at to the amounts at this time. Please keep in mind, if the employee salary is already at $100,000+ annualized, the bonus paid to this employee will not help with Loan Forgiveness.

Retirement or health insurance contributions

No additional PPP Loan Forgiveness for retirement or health insurance contributions for self-employed individuals, including Schedule C filers and general partners. Your PPP Loan Forgiveness is limited to the $100,000 annual computation.

Payroll Costs Eligible for PPP Loan Forgiveness

When must payroll costs be incurred and/or paid to be eligible for forgiveness?

Payroll costs paid or incurred during the eight consecutive week (56 days) covered period are eligible for PPP Loan Forgiveness.  You can chose one of two periods:

1. the date you received your PPP loan proceeds from your Bank (i.e., the start of the covered period);or
2. the first day of your first payroll cycle in the covered period (the “alternative payroll covered period”).

Example:  You compensate your employees on a  bi-weekly payroll basis (every other week).  Let’s assume your eight-week covered period begins on June 1 and ends on July 26.  The 1^st day of your first payroll cycle that starts in the covered period is June 7. You may elect an alternative payroll covered period for payroll cost purposes that starts on June 7 and ends 55 days later (for a total of 56 days) on August 1.  Payroll costs paid during this alternative payroll covered period are eligible for forgiveness.  Also, payroll costs incurred during this alternative payroll covered period are eligible for forgiveness as long as they are paid on or before the first regular payroll date occurring after August 1.

Nonpayroll Costs Eligible for PPP Loan Forgiveness

When must nonpayroll costs (Rent , Utilities & Mortgage Interest) be incurred and /or paid to be eligible for forgiveness?

A nonpayroll cost is eligible for forgiveness if it was:

1. paid during the covered period; or
2. incurred during the covered period and paid on or before the next regular billing date, even if the billing date is after the covered period.

Example:  Let’s assume your covered period begins on June 1 and ends on July 26.  You pay your May and June electricity bill during the covered period and you pay your July electricity bill on August 10, which is the next regular billing date.  You may seek loan forgiveness for your May and June electricity bills, because they were paid during the covered period.  In addition, you may seek loan forgiveness for the portion of your July electricity bill through July 26 (the end of the covered period), because it was incurred during the covered period and paid on the next regular billing date. Please maintain copies of invoices and canceled checks so we will have them when we file for PPP Loan Forgiveness.

Will a borrower’s loan forgiveness amount be reduced if the borrower laid-off or reduced the hours of an employee, then offered to rehire the same employee for the same salary and same number of hours, or restore the reduction in hours, but the employee declined the offer? 

No.  If you offered to rehire your employees, you are generally exempt from the PPP Loan Forgiveness reduction calculation. Here are the requirements:

1. you made a good faith, written offer to rehire such employee (or, if applicable, restore the reduced hours of such employee) during the covered period or the alternative payroll covered period;
2. the offer was for the same salary or wages and same number of hours as earned by such employee in the last pay period prior to the separation or reduction in hours;

iii. the offer was rejected by such employee;

1. the borrower has maintained records documenting the offer and its rejection; and
2. the borrower informed the applicable state unemployment insurance office of such employee’s rejected offerof reemployment within 30 days of the employee’s rejection of the offer. Further information regarding how you will report information concerning rejected rehire offers to state unemployment insurance offices will be provided on SBA’s website.

Will a borrower’s loan forgiveness amount be reduced if an employee is fired for cause, voluntarily resigns, or voluntarily requests a schedule reduction?

No.  When an employee of the borrower is fired for cause, voluntarily resigns, or voluntarily requests a reduced schedule during the covered period or the alternative payroll covered period , the client may count such employee at the same full-time equivalency level before the FTE reduction event.

Loan Forgiveness – Documentation Requirements What must borrowers submit for forgiveness of their PPP loans?

The loan forgiveness application form details the documentation requirements; specifically, documentation each borrower must submit with its Loan Forgiveness Application (SBA Form #3508), documentation each borrower is required to maintain and make available upon request, and documentation each borrower may voluntarily submit with its loan forgiveness application. Please be sure to maintain all payroll reports , along with invoices and canceled checks during your covered period.

When is your SBA Loan Forgiveness Form Due?

You have until October 31, 2020 to file your SBA Loan Forgiveness Form. The lender has 60 days from receipt of a complete application to issue a decision to SBA.

PPE Equipment ?

If you are in need of PPE Equipment and supplies, please click here >>  www.crazydentalprices.com

You will receive a 10% Discount if you use the Code Word Schiff10

If you need personal service, please contact Jay Glazer at jay@crazydental.com, or 410-205-8033

SBA PPP Loan Forgiveness Application 05.15.20

I have reviewed the PPP Loan Forgiveness Application 05.15.20 (released on Friday evening at 7:15 PM) and have highlighted on the 11 Pages, the instructions pertaining to each line along with the cross reference for each of the Line #’s to make it easier for you to track where the #’s are coming from and what documentation will be needed in order to gain PPP Loan Forgiveness

Here are some highlights for you

1. Alternative Payroll Period – the payroll period can be extended beyond the covered period if you are paying on a frequency, such as bi-weekly payroll and the payroll period extends beyond the “8-week” covered period
2. Bi weekly Payroll – your can stay on bi weekly payroll even if it is beyond the covered period. We initially thought you would have to switch to weekly…this not the case
3. 56 days are the covered period, not 8 weeks so if your start date is April 26^th, the end date is June 20^th and not the 8 week period of June 21^st
4. Health insurance – page 5 – it appears the owners health insurance can be included as a payroll costs – we will need further clarification
5. Retirement Plan Contributions – page 5 – it appears the owners retirement plan contribution can be included as a payroll costs – we will need further clarification.  We will also need to confirm the payment of the 2019 Liability that remains unpaid at this time.
6. Employee Rehire Letter & employee rejection confirmation(s) – we need to keep these on file for a 6 year period (pg. 8)
7. FTE – is defined as 40 hours a week – anything less than 40 hours = .5 FTE (pg. 7 and pg. 9) we will need to discuss this for most of our clients work a 32 hour week as opposed to a 40 hour week.  We will need further clarification
8. Payroll substantiation – need copies of payroll reports from ADP, Paychex, etc. (pg. 10) in order to support the Payroll Costs as part of the PPP Loan Forgiveness.
9. Business Mortgage Interest Payments – Information needed to gain PPP Loan Forgiveness – Lender Amortization schedule and canceled checks or lender account statements (pg. 10)
10. Business Rent – Information needed to gain PPP Loan Forgiveness – copies of Lease Agreement  or canceled checks or Lessor Account Statements  (pg. 10)
11. Utility Payments – Information needed to gain PPP Loan Forgiveness – copies of invoices from February 2020 and invoices during the covered period cancelled checks or account statements verifying the payments (pg. 10)
12. Statute of Limitations – 6 years (pg. 10)

Please take the time to review the attached as well. You may need to obtain your CPA Certification in order to complete the PPP Loan Forgiveness Application!!  :>) ….. I am sure these forms will change again before we see the final PPP Loan Forgiveness forms from the SBA. I will let you know, if this is the case.

As a reminder, please keep a file for all of your supporting documentation, so we can help you gain maximum PPP loan forgiveness.

Rehire Letter (employee rejection Letter)

The employee “rehire letter” is a must during these times. Why? Because based on current guidance, you will be “forgiven” if you have 6 employees as of June 30, 2020 as opposed to the 8 employees you had as of February 15, 2020, as long as you have 2 employee rejection letters to substantiate the decline in employees from 8 to 6. These letters must be retained for 6-years.

I have attached a suggested “employee rehire letter”.

Can you and / or your employees stay on Unemployment?

Once you announce the reopening of your office, you and your employees must come off of unemployment. It is your responsibility to notify your State’s Unemployment division, that you have reopened your dental practice.

Video introduction on your new PPE Procedures within your office

I feel this is a great idea announcing to your patients what your new PPE procedures will be as we move forward, “Post Covid”

The following two (2) Videos are from the ADCPA as well as a local orthodontist. I do not represent either of these clients. I wanted to share, in case you wanted to produce a Video for your practice as well. I have received permission to share these videos.

https://youtu.be/_KvCf450TR0

https://nam10.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.facebook.com%2F113449855409561%2Fposts%2F2980177322070119%2F%3Fvh%3De%26d%3Dn&data=02%7C01%7Cart.wiederman%40hmwccpa.com%7Cfe1784d576c14fab0a8f08d7f8ec7e2c%7C0ae8eb149b024869b4843b7b85f009b0%7C1%7C0%7C637251566935192657&sdata=gZE38boCfNCJaX3o2f7ZIU35tfwruR%2F1df11cX1wAto%3D&reserved=0

If you would like to share your practices Video, I would be happy to share with our Schiff Dental Clients. We are just an e-mail away!

Please enjoy your Sunday!

SBA / US Treasury Guidance – update – PPP Loans
We are still waiting for the guidance on, what are the rules on how to properly spend your PPP funds? As soon as they are released, we will summarize them for you.

Accounting for your PPP Loan Proceeds – in QuickBooks / Peachtree / MYOB

We at Schiff have come up with a procedure to account for the PPP funds used for qualified expenses.

How to account for your PPP loan funds in your accounting software?

1. Setup new General Ledger liability account – PPP loan payable – code your deposit of funds to this account—- Entry for initial deposit  is  Debit Cash, Credit PPP loan payable
2. Code all disbursements to this PPP Loan Payable account —-(Entry for each PPP payment is Debit PPP loan payable, Credit Cash)
   • Payroll – Gross wages for each employee and SUTA tax (FICA and FUTA should be coded to Payroll tax expense account) , please recall that if an Associate is on Payroll, their Payroll is limited to $1,923 a week.
   • For Sole member LLC (Schedule C) – Draws – Code $1,923 per week for owner , Debit the PPP Loan Payable, Credit Cash
   • Health insurance – employees only – charged against the PPP Loan Payable as a Debit, Credit Cash
   • 401k match for employees only if you have been funding the match per payroll – charge to the PPP Loan Payable as a Debit , Credit Cash
   • Rent or Interest on Mortgage – Please charge these disbursements against the PPP Loan Payable Account as a Debit, Credit Cash . Please make sure you have a copy of your current lease
   • Utilities – Please charge these disbursements against the PPP Loan Payable Account as a Debit, Credit Cash – Utilities include >> Gas & electric, water, internet access and telephoneWhen the PPP loan account zeros out, you have spent all PPP funds. The gross wages, staff health, 401k match & SUTA paid from this PPP loan account should total to 75% or greater than the original PPP loan amount. When the account is zero you should return to your regular accounting entries.
3. Keep copies of invoices and/or cancelled check in a separate folder so we can render an “accounting” to the bank at the end of the 8-week period.

Please reach out to your Schiff Team member if you need help setting this up within your Accounting Software

COVID-19 & Dentistry: Teledentistry, Billing for PPE, & In-practice Virus Testing

Below, is an excellent webinar (tomorrow at 5 PM EST) on the above subject matters, to include, “How to bill for PPE”? We are getting a lot of calls and e-mail inquiries on this very subject. As many of you know, Dr Charles Blair and I have been great friends for over 20 plus years. Dr Blair always shares beyond the attendees expectations. I would highly encourage you to register for this webinar.

Beyond the challenges associated with ramping up a practice during the COVID-19 recovery phase, dental offices are also faced with navigating new coding practices. Join Dr. Charles Blair, dentistry’s leading authority on insurance coding strategies, fee positioning and strategic planning, for a critical update on what practices can put into place for a stronger comeback. Dr. Blair will discuss:

• Increased PPE costs and what can be done to offset this
• In-practice virus testing including the required waiver certificate and the two new codes that will be effective as of June 1
• Coding for teledentistry

RESERVE MY SPOT
If you cannot make the live webinar, be sure to register anyway and we’ll send you the recording afterward.

Dear Schiff Dental Clients
Good morning to all!
I hope each of you, your families and clients are well!
We are here for you!

Schiff Dental Clients Update , Thursday , May 7, 2020 7:30 AM

COVID-19 Update: Dental Practice Reopening and PPE Survey

Yesterday, Governor Hogan (Maryland) announced effective at 7 AM today (Thursday, May 7th), elective and non-emergency health care procedures, including dental procedures, can begin provided that the office has in place the measures outlined in the Maryland Department of Health’s (MDH) regulations dated Wednesday, May 6, 2020. Please see below the full e-mail from the MSDA , Greg Buckler, IOM, MBA, MSM, Executive Director and Dr Marlene Shevenell, President.

PPP Loans – now what?

Now that the States of Maryland, West Virginia, North Carolina and Virginia are open or will be opened shortly, we are suggesting to each of you to start spending your PPP Loan Proceeds now. Please keep in mind under the current guidelines, you must spend at least 75% or more of your PPP Loan Proceeds (within the 8-weeks of beginning on the date of receipt) on the following as Payroll Costs (defined as Employee Wages, Your annual Wages limited to $100,000, Health Insurance for your team, 401k match / SIMPLE Match for your team and your State Unemployment Costs). The remaining 25% of your PPP Loan can be spent on Rent, Utilities (Telephone, Gas & Electric, Internet Access and Water) and interest on a Mortgage that was in place prior to February 15, 2020.

Some of the questions you may have are as follows:

1. Can I pay my team a bonus? If so how much?
2. Can I pay family members?
3. Can I give my employees a raise?
4. What happens if some of the employees refuse to come back to work due to what they are receiving as Unemployment Benefits?
5. Can I wait until week #7 to pay 8 weeks of salary?
6. Now that you received your PPP Funds, do you as the employer need to contact your States Unemployment Division?
7. Can employees who work reduced hours, can they still collect “partial” unemployment?
8. Can we pay employees who remain at home and are collecting unemployment , a bonus?
9. Do you need to have a separate Checking Account for your PPP Loan?

PPP Loan Accountability

Please keep in mind, at the end of the 8-week period, we will have to render an “accounting” to your PPP Lender. We are suggesting you maintain a file that consist of your Payroll Reports (Weekly, biweekly or bi-monthly), copies of invoices & canceled checks to support your Rent, Telephone, Gas & Electric, Internet Access and Water) and interest on a Mortgage that was in place prior to February 15, 2020. We have attached an excel worksheet to this e mail to help you account for your spending of your PPP Loan Proceeds during your 8-week period. If you need our help, please reach out to your Schiff Team Member.

PPE Equipment and Supplies

If you are in need of PPE Equipment and / or supplies, please click here https://mailchi.mp/fa3642b208a0/cdpschiff   For further information , please e mail >> Jay Glazer at  >>  jay@crazydental.com

ADA – Return to work Interim Guidance Toolkit

You may want to consider visiting the ADA Web Site “Return to work Interim Guidance Toolkit”. The web site has an abundance of interim guidance information along with Sample Letters. Please click here>>

https://success.ada.org/~/media/CPS/Files/Open%20Files/ADA_Return_to_Work_Toolkit.pdf

SBA issues PPP guidance on laid-off employees who refuse to be rehired

Dental Practices that have received PPP loans can exclude laid-off employees from loan forgiveness reduction calculations if the employees turn down a written offer to be rehired This is according to new guidance from the SBA. Furthermore, the SBA has warned the employees who reject offers of reemployment may find themselves ineligible to continue receiving unemployment benefits.

We are anticipating the interim final rule will specify that a PPP borrower may exclude an employee from loan forgiveness calculations if the borrower made a good-faith, written offer of rehire and also documented the employee’s rejection of that offer. You may want to check with your HR Attorney on what the documentation should look like.

EIDL Loans – Update

Many of you were contacted yesterday (Wednesday, May 6, 2020), that your SBA EIDL Loan has been approved. Many of your approvals are at the range of $150,000. If you accept this approval, it will amortize over 30 years at 3.75% Fixed, with the 1^st Twelve (12) months deffered. These EIDL Funds can be used for your payables, like Dental Supplies, Lab Fees, Office Supplies etc. We are recommending you do NOT use the EIDL funds to pay any Payroll. Please use your PPP Funds for your future as mentioned above.

ADCPA PODCAST – How to use the EIDL & PPP Funds?

Here is a great ADCPA Podcast on “How to use , the EIDL & PPP Loans”? Please listen  to Art of Dental Finance and Management on Apple Podcasts. https://podcasts.apple.com/us/podcast/art-of-dental-finance-and-management/id1440331736 I have attached to this e-mail the David Hochman Checklist – reopening your Dental office as mentioned in the ADCPA Podcast.

We are here for you!
My best to all
Allen

Dear Schiff Dental Clients
Good evening to all!
We are here for you!

Dr. Gehani, President of the American Dental Association sent this Issues Alert to all ADA members in which he asks them to reach out to their members of Congress to advocate for policy priorities that will benefit dentists, their employees and their patients.”

Please note, the ADA’s position on “when should the clock start running for the use of the PPP Loan Proceeds”, and the possibility of using your expenditures for your PPE Costs as part of the PPP Loan Forgiveness and / or a Income Tax Credit. This letter was sent to Congress by the ADA

We at Schiff are urging all of our clients to click on the “hyper link” embedded in the ADA e mail and for you to contact your members of Congress , and share with him / her how you feel about the current PPP Loan Process and the related expenditures for PPE Costs

We are proud to be working with the ADA on these policies. The ADA remains at the forefront to do what is “right” for the Dental Community.

Many thanks
My best to all!
Stay well!
Allen

Issues Alert

Congress Plans Next COVID-19 Relief Legislation

As many states begin the reopening process, Congress will also be returning to Washington, D.C. to deliberate on the next legislative package in response to the COVID-19 pandemic. Our 163,000 members came together to ensure that Congress included our dental concerns in the previous package, the Coronavirus Aid, Relief and Economic Security (CARES) Act, and now we need your help once again! We expect the next bill to expand on some of the provisions in the CARES Act, as well as address other concerns and issues brought forth by the pandemic. We are asking Congress to include the following provisions in the next phase of economic stimulus and COVID-19 relief legislation: Give small businesses increased flexibility within the Paycheck Protection Program (PPP) for which they seek forgiveness for the PPP loans. This will allow small businesses to make more appropriate decisions about staffing and payroll based on when they plan to fully reopen. Ensure adequate oversight over the distribution and loan forgiveness provisions in the CARES Act for PPP loans. This will guarantee that only those small businesses that were economically distressed as a result of the pandemic receive the funds and forgiveness. Intensify the production of personal protective equipment (PPE) and focus its distribution to dentists and health care providers who are treating emergency cases or near-emergency cases now and in the future without an adequate supply of N95 masks and face shields. This will help the dental team to continue to practice in a safe environment for themselves and their patients. Provide tax credits or allow PPP funds to be used for the purchase of additional PPE and safety improvements to the office. This will assist financially stressed practices in providing an additional layer of safety and protection. Extend the Department of Health and Human Services’ discretionary authority during public health emergencies to provide targeted liability protections for providers who administer FDA-authorized COVID-19 diagnostic tests within their scope of practice until the end of 2020. This will expand the nation’s capacity to screen patients for COVID-19 outside of already burdened hospital emergency departments. Permit nonprofit dental and medical organizations to utilize the PPP or future small business loan programs. This will ensure that non-profit medical and dental associations can continue to serve as a trusted resource for their health care professionals and patients. Please click here to let your members of Congress know how important these provisions are for your dental practice, patients and our profession as a whole. Thank you for your continued advocacy. Together, we will make a difference! Stay well,

Chad P. Gehani, DDS President

Dear Schiff Dental Clients

Good Morning to all! I hope each of you are well and safe

We are here for you!

Schiff Dental Client Update as of Friday, May 1, 2020  at 7:00 AM

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Why You Should Consider Filing a Business Interruption Insurance Claim

What is business interruption coverage?

This type of insurance coverage is known by several different names: business interruption, loss of use, loss of income are the most common descriptions.  Often this coverage is part of a liability or commercial policy.  Business interruption coverage provides loss of income following a disaster. The question becomes, “will your commercial insurance policy cover COVID-related losses”?

When we first reached out to insurance companies along with the ADA in early March, we were told they did not believe any coverage was available due to exclusions.  Some policies have specific virus-related exclusions while others have additional exclusions that seemed to indicate no coverage was available. We have since learned there are Attorney’s that are pursuing these claims on behalf of your Dental Practice.

Why does filing a claim now seem more viable?

Since our initial conversations in March, we have attended several webinars and read numerous articles by attorneys who specialize in insurance claims.  We now believe dentists should consider filing a business interruption claim.  Even though policies have exclusions, since practices were forced to shut down due to government mandates, ADA recommendations along with your State Board of Dentistry, there may be coverage available for loss of income due to the pandemic.

Here is a link to an excellent article written by attorneys Doug Alexander and David Briggs that provides more information about business interruption coverage and potential claims: https://sglaw.com/business-interruption-coverage-in-the-age-of-covid-19/  Please read this article.

In addition, we recommend that you listen to the Art of Dental Finance podcast, produced and hosted by our ADCPA colleagues, Art Wiederman, CPA (Los Angeles, CA).  Art’s most recent podcast covers business interruption insurance and the challenges we are facing with the US Treasury issuing no guidance. We highly recommend that you listen to it: https://www.hmwccpa.com/2020/04/29/are-your-losses-from-covid-19-covered-under-your-business-interruption-insurance-policy-with-attorney-randy-curry-the-art-of-dental-finance-and-management-podcast/

What to do next?

The statute of limitations for filing a claim “for the loss of income” could be 60 – 90 days after your Dental Practices was requested to close.  Therefore, we recommend contacting your corporate attorney as soon as possible.  Ask your attorney to review your insurance policies to determine the best course of action to take. Please also request of  your Attorney to contact Randy Curry, Esquire mentioned in Art’s Podcast. Randy can be contacted at 949-258-4381 or rcurry@currylawyers.com . Randy can share with you additional information about filing claims and answer your questions and concerns.

If you want to file a claim, it is very important for the claim to be filed correctly and in a timely manner.  While it is very likely the claim will be initially denied, a correctly filed claim may be eligible for reconsideration as part of a class action lawsuit or other government action.

If you want to be directed to a firm that will consider your case as part of a larger group of contingent fee claimants, then please consider contacting Keller Rohrback (Seattle, Washington)

Keller Rohrback is actively pursuing coverage on behalf of dentists (and other small business owners) across the country for COVID-19 related business interruption.

They are interested in talking to anyone who has been denied, and also anyone who is concerned that they may be denied or is unsure about making a claim for the “loss of income”.

Please contact John Oldach at: joldach@kellerrohrback.com or (805) 364-4590.

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We are here for you!

Please stay well…enjoy the weekend!

My best

Allen

The Art of Dental Finance and Management

Informative weekly podcast for dental practices.

This week’s topic:

Are Your Losses from COVID-19 Covered Under Your Business Interruption Insurance Policy?

with Randy Curry, Esq.

Attorney Randy Curry and Art discuss issues facing dentists during the COVID-19 pandemic in this episode of The Art of Dental Finance and Management podcast:

• Whether a dentist’s business interruption policy can cover losses
• Policy provisions in these types of policies
• Ongoing litigation
• Potential state and Federal legislation coming which could require insurance companies to cover situations such as COVID-19
• What actions dentists should take to potentially receive financial benefit from these policies

Art also provides updates on:

• Recent SBA Interim Guidance on calculating the PPP loan
• Insight regarding bringing the dental team back early
• New grant program from Facebook New CDT code issues to cover PPE costs expected when dentists re-open their offices

This episode is packed with helpful information for dentists to navigate these challenging times.

Dear Schiff Dental Clients

Good afternoon to all! I hope each of you are well and safe

We are here for you!

Schiff Dental Client Update as of Thursday, April 30, 2020  at 4:00 PM

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PPP Loans – I now have my PPP Loan , what should I be doing?

Many of you have received your PPP Loans. If your practice is located in the Commonwealth of Virginia, you are more than likely going back to work this Monday, May4th. You should be on schedule to satisfy the 75% / 25% , PPP Loan requirements. This is also true for our clients in West Virginia (May 11^th) as well. Texas is scheduled for May 11^th and District of Columbia is scheduled for May 15^th.  So , each of you should be well on your way to satisfy the PPP Loan Forgiveness. However, our clients in Maryland (TBD) and North Carolina (TBD), are to be determined.

We are stressing you (Maryland & North Carolina) wait to spend your PPP Funds until next Tuesday, May 5^th. The reason for this is, we are awaiting the US Treasury guidance as well as the impact of the ADA (below) and the AICPA (also below). The guidance we are seeking, will answer many of your questions, such as…….

For example…..

1. Can we spend our PPP Funds on May 2020 Rent?
2. Can we spend our PPP Funds on our current utilities?
3. Can we pay some of our team members, but not all team members?
4. Can we just pay the Partners and not pay the team?
5. If I received $100,000 in PPP Funds, and spend $60,000 on payroll Costs and $25,000 on intended costs, what is the ratio of Loan Forgiveness? ($85,000/$100,000 ?) x $15,000 or ($60,000/$75,000) x $15,000 or another method?
6. If the doctors pay themselves more than $15,385, will they be penalized in regards to forgiveness?
7. What if the Doctors pay themselves $15,385 only through payroll but take a Sub S distributions too?  Is that a problem?
8. Can we wait until week #4 and start  the payroll process> or better yet , can we wait until week # 8 and pay 8 weeks worth of payroll then?
9. Can I pay April, May and June Rent as part of my intended costs?
10. Can I pay the intended costs now and just wait for payroll costs in the near future?
11. I have my PPP funds, I intend to pay all of my employees, but some want to stay on unemployment…is this a problem?

The above, is an example of many of the questions we are receiving at this time. We need more guidance from the US Treasury to advise you . We have all seen over the last 6 weeks, how the “rules and regulations” change (almost hourly!), and I suspect we will have another change or two before this is all done. So, please be patient , at least and until next Tuesday, May 6^th to allow us to guide you!

If you feel you need to start spending your PPP funds now, please do so. However, we are asking you to please wait a couple of days to allow for the guidance to occur. Why are we asking you to wait? We are working with closely with the ADA on the PPP Loan process and we suspect there will be changes to the PPP Loan forgiveness program as a result of the ADA’s involvement. The ADA is being very supportive very understanding and they are doing a great job in representing you. I am proud to be associated with them! Please understand , there are no guarantees, but we are doing our best , to create practical solutions at this time.

ADA Update

This afternoon, I spoke with the ADA (Government Affairs) on the following subjects

1. PPP Loan Forgiveness starts when the States Governor’s open their respective States, NOT when the monies were funded! vs. current rules that state you must start spending now, upon receipt of the funds.
2. PPE Equipment is acquired in 2020, would qualify as an “investment tax credit at 100%
3. PPE supplies, if acquired in 2020, would qualify as PPP Loan forgiveness as “other intended costs”, in addition to Rent & Utilities.

As I mentioned above, the ADA is well aware of the above issues. I have discussed these at length with them. Please also see the attached letter.  The ADA letter is very much on point!

Also, the ADA Grassroots action will take place next Tuesday (May 5th). The ADA is hoping they will get the attention of Congress to address these issues. Congress resumes in mid May 2020.

AICPA Update

The AICPA (American Institute of Certified Public Accountants) is the world’s largest member association representing the accounting profession, with more than 431,000 members. The AICPA has also weighed in on the PPP Loan Forgiveness Program

Please read the AICPA suggestions on when the “8-week period” should begin

https://www.journalofaccountancy.com/news/2020/apr/ppp-loan-forgiveness-aicpa-recommendations-coronavirus-relief.html

This is exactly of what I have been saying all along>>> …… The eight-week period should commence once stay-at-home restrictions are lifted, not when loan proceeds are received.

I have shared this with the ADA as well. They are fully aware the AICPA is being fully supportive of when “does the 8-week period begin”, along with the ADCPA

US Treasury Guidance

We are still uncertain when the Treasury guidance will be released. As a result, the ADCPA Partner Group will meet on Monday, May 4^th at 9 PM EST, in order to arrive at the “ADCPA Strategy”. This meeting will allow us, to consult with our clients on how to maximize PPP Loan Forgiveness as well as answer many of the questions that have been asking over the last few days

PPP Accounting procedures

Special “thanks” to Dr  Clayton McCarl (Greenbelt Maryland) for sharing how he has set up special accounting procedures. The procedures that Clayton has set up , will allow him, to account for the various disbursements out of the PPP Loan Proceeds. For example, all of the future payroll will come out of the newly created PPP checking account. ADP Payroll was very helpful in setting this up. Clayton has also set up reoccurring monthly expenditures out of the newly formed checking account as well. These procedures, if set up properly, will create ease when rendering an accounting to your bank after the 8-week period expires.

PPP Loan “resources” – smaller banks

Yesterday, it came to our attention, you may want to consider using a smaller bank (AMEX  or PayPal, etc ) for your PPP Loan Application process. We are recommending, if you have not heard from your primary bank on the status of your PPP Loan Application, you should consider applying to a smaller bank. Special “thanks” to Dr Jack Kayton (Charlottesville VA) for bringing this resource to my attention. Here is who Jack has worked with and speaks highly of.

Seth G. Bokelman

Market President

1111 Greenville Ave

Staunton, Virginia  24401

Cell: 540-520-4639

Fax: 540-887-6504

seth@myselectbank.com

I have also reached out to Seth, and he said to mention my name when applying for your PPP Loan, so the loan process can be expedited.

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We are here for you!

Please stay well

My best

Allen