The US government passed a 2.2 trillion dollar Coronavirus Aid, Relief, and Economic Security (CARES) act law. Now, it will begin to ripple through the American economy helping business owners and individuals alike. Many physical therapy practices may be eligible for benefits. These benefits include a 350 billion forgivable loan program, payroll tax credits, grants, breaks on current loans and more.So what does this all mean, who qualifies, and how will this work for PT practices?Here are the provisions in place for physical therapy practice owners in the coming months, so you can better prepare during these uncertain times.
Massive amounts of Federal Government funds are available to help many small businesses weather the storm during this economic downturn. The provisions being put in place are geared toward retaining employees and throwing a metaphoric life vest to your physical therapy practice for the time being until the economy can turn around.Here's a list of benefits offered by the Federal Government and affiliated organizations that could help immediately:
The Small Business Administration is issuing an economic emergency grant of up to $10,000 for payroll, sick leave and other debt obligations. These grants are helpful if you need funds to pay your bills or staff immediately, as you could see funds within three days of applying.
To maintain staffing levels, the most substantial portion of the stimulus package, the Paycheck Protection Program, is aimed at helping small businesses. The provisions in this loan are a defibrillator to small businesses across America, helping you keep the foundation of your business alive with a loan that provides jolt assistance in a time of need.The Paycheck Protection Program, a low-interest loan for qualifying small businesses, provides financial assistance with all payroll obligations. These are forgivable loans except for the interest accrued and instances concerning misuse of the loan.Your practice is eligible if you have less than 500 employees, were established before February 15, 2020, and plan on using the loan for short-term operating expenses. Qualified payees also include those who are self-employed and sole proprietors. According to the bill, priority goes to under-served and rural markets, including active or prior military, women, disadvantaged individuals, and businesses that are within the first two years of operation.SBA lenders are paying out roughly ten weeks of payroll obligations up to 10 million dollars. The loans are guaranteed low interest, will cap at 4% interest rates, and can only be used for the following:
Additionally, the amount forgiven would not count against your practice as taxable income.You'll have access to these loans through over 800 different Small Business Administration approved banks and credit unions. The bill also calls to increase this number and, for agencies to expedite these loans to provide immediate assistance.If you've collected the emergency grant mentioned above, the overall loan forgiveness decreases by the amount received up to $10,000.
The stimulus package has allocated 17 billion dollars for those who currently have an existing loan with the SBA. If your practice has an existing loan, the interest and principal defer for six months.
Included in the bill is a payroll tax credit equal to 50 percent of qualified wages paid by eligible employers. The CARES employee retention credit applies to the employer's share of the social security or FICA tax and caps at $10,000 per employee.If the credit exceeds the employer's share of FICA taxes, the excess will be refunded and will apply to qualified wages between March 12 – December 31. Under the new legislation, the IRS has the authority to advance tax credit payments and waive failures to deposit.When working through the CARES act, there are crucial distinctions when defining "qualified wages" and "eligible employees." Here's the breakdown to aptly label your practice:
These credits can also be limited or unavailable to those receiving other tax credits and loans. For the latest information, visit the Coronavirus Tax Relief section on the IRS website.
It can take months to find stellar candidates and even longer to build a highly capable team. When you invest in finding premium talent, you must protect those investments. The CARES Act is providing an opportunity to continue paying your physical therapists when the work just isn't there. And hopefully, when America gets back to work, you won't have to find new staff.Additionally, the stimulus package allows small businesses to hit the pause button on just about everything by taking advantage of low-interest forgivable loans to pay the essentials, like rent and utility bills.For some, it's merely a backup plan in case things start to deteriorate, but for others a necessary lifeline.
There are a few loans, including the Paycheck Protection Loan, that the Small Business administration is not directly overseeing. The Paycheck Protection Loan will require an application in person through an approved SBA lender. If you'd like to find the closest borrowers in your area, consider using the official SBA lender match tool.Others will require an application submission through the Small Business Association or Internal Revenue Service website.Finally, we are not financial advisors or tax specialists, so please visit The Small Business Association, Internal Revenue Service, and other affiliated government websites when making financial decisions and applying for support.
During these challenging times, you've got to turn over every stone. Several new programs may serve your needs. It appears that additional packages may be forthcoming so check back often for more info.
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