01 Apr 2020 CARES Act Resources
CARES Act Resource Center
Medusind’s Finance Team has compiled the below documentation in an attempt to assist our customers and the broader healthcare community in navigating the CARES Act. The following information is provided as is for your convenience. Be advised that Medusind does not and will not act as your fiduciary but will gladly make introductions to qualified professionals who can assist you and your practice. You may also view an on demand webinar created by WIPFLi CPAs and Consultants that will be helpful for your organization.
There are time sensitive items of which you need to be aware including the mandates in the Families First Coronavirus Response Act (FFCRA) that take effect 4/01/20 and the new loan program and employer tax credits available in the CARES Act. After reading, we highly encourage you to begin planning for needed efforts for relief to be made available. We encourage you to spend the approximately 1 hour it will take to review the entirety of this information.
On March 27, 2020, Congress passed and the president signed into law the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).
The key highlights of the CARES Act at the highest level are (we’ve bolded those we feel are specifically relevant for your business):
- Gave direct payments of up to $1,200 for individuals and $2,400 for couples, with $500 added for every child, based on 2019 tax returns for those who filed them and 2018 information, if they have not. The benefit would start to phase out above $75,000 in income for individuals and $150,000 for couples, going away completely at the $99,000 and $198,000 thresholds, respectively
- Boosted unemployment insurance, adding $600 per week for up to four months on top of what beneficiaries normally receive from states. It expands eligibility to self-employed people and independent contractors
- Created a $500 billion pool of taxpayer money to make loans, loan guarantees or investments to or in businesses, states and municipalities damaged by the crisis
- Gave $25 billion in grants to airlines and $4 billion to cargo carriers to be used exclusively to pay employee wages, salaries and benefits, and set aside another $25 billion and $4 billion, respectively, for loans and loan guarantees
- Provided $17 billion in loans and loan guarantees for unspecified “businesses critical to maintaining national security”
- Put $117 billion into hospitals and veterans’ health care
- Provided $16 billion for the strategic national stockpile of pharmaceutical and medical supplies
- Gave $350 billion in loans for small businesses to cover salary, wages and benefits, worth 250% of an employer’s monthly payroll, with a maximum loan of $10 million
- Included a tax credit for retaining employees, worth up to 50% of wages paid during the crisis, for businesses forced to suspend operations or that have seen gross receipts fall by 50% from the previous year
- Required group health plans and insurance providers to cover preventive services related to coronavirus without cost sharing
- Delayed payroll tax for employers, requiring half of the deferred tax to be paid by the end of 2021 and the other half by the end of 2022
- Banned companies that take government loans from buying back stock until a year after the loan is paid back
- Barred employees or executives who made at least $425,000 last year from getting a raise
- Stopped President Donald Trump and his family members’ businesses from receiving emergency taxpayer relief. The provision also applies to Vice President Mike Pence, heads of executive departments, members of Congress and their family members
- Suspended federal student loan payments through Sept. 30 with no accrual of interest on those loans
Please click to download the following documents for your review which we believe would be most relevant to you, our valued clients:
- Small Business Owner’s Guide to the CARES Act Summary – Additional information opportunities related to (Attachment I)
- Paycheck Protection Program FAQs for Small Business (Attachment II)
- PPP Loan and Forgiveness Estimator Worksheet – (Attachment III) This is still under development but will give you a top side view of what your participation would look like. Numbers provided are for demonstration purpose only.
- CARES Act – Business Tax Provisions and other Impactful Business Points – (Attachment IV) (Please review relevant portions of this document with your tax counsel and payroll provider)
- Coronavirus information relevant to tax professionals – (Attachment V) This covers Phase 2 of legislation, the Families First Coronavirus Response Act (FFCRA); the mandates take effect on 4/01/20 (Please review with your payroll provider / tax counsel)
- Overview of State/Local Loan Opportunities – (Attachment VI)
Specific to the sector we support, the CARES Act makes funds available to Healthcare Providers. The Act appropriates $117 billion to reimburse, through grants or otherwise, eligible healthcare providers for healthcare-related expenses or lost revenue attributable to COVID-19. Under this provision, “eligible healthcare providers” means public entities, Medicare or Medicaid enrolled suppliers and providers, and other for-profit and non-profit entities as the Secretary of HHS may specify, that provide diagnoses, testing, or care for individuals with possible or actual cases of COVID-19. These funds are available for building or constructing temporary structures, leasing property, medical supplies and equipment, increased workforce and training, emergency operation centers, retrofitting facilities, and surge capacity. To be eligible for these funds, a healthcare provider must submit an application to the Secretary of HHS, which we expect HHS to develop in the coming days.
As stated, all of this can be overwhelming and most certainly will be subject to many clarifications and changes. The Small Business Administration, banking institutions, CPA’s, tax professionals, other financial advisers and financial support groups are all digesting the concepts and will have additional questions on specific issues being experienced by their clients. As with most legislation, there are a number of areas where additional guidance will be required. The purpose of this communication is to attempt to provide a broad awareness of key provisions that will affect your business and to strongly encourage you to start the loan application process. The CARES Act provisions are clearly meant to be a strong encouragement to keeping people employed instead of furloughing or letting them go. As helpful as these opportunities may be, careful consideration must be given to one’s ability to meet the forgiveness provisions of this government lending. After review, we strongly encourage you to contact your business financial and tax support teams and banking institution/partner for immediate planning of next steps and application submissions given current timelines. Key information we recommend you have available to assess eligibility and prepare for your application process if this makes sense for you: NAISC Code / Federal Tax Returns (3 years) for your organization / Payroll registers / Submitted Form(s) 941. Links are embedded below to assist you with SBA definitions of a small business as well as the index of NAISC codes. Key sections of the embedded document we encourage you to review are: §121.101, §121.102, §121.104, §121.201
We hope this assists you in moving forward with navigation of all the opportunities that have been made available in efforts to get your health organization / practice through these very extraordinary and challenging times. We will continue to forward any further relevant information that may provide further assistance as it becomes available.