COVID-19 relief package passed by Congress has implications for dentists
Thursday, March 26, 2020
In a month otherwise filled with tough news, Congress passed a $2 trillion stimulus package that is designed to help people, states and businesses all across the country that are devastated by the coronavirus pandemic. The Coronavirus Aid, Relief and Economic Security Act — or CARES Act — passed the Senate on March 25 and the House on March 27.
Following the Senate vote, the American Dental Association reached out to member dentists.
Dental Industry Implications
Following the Senate vote, the American Dental Association (ADA) reached out to member dentists. In the communication brief, ADA President Chad P. Gehani stated, “For the last few weeks, the American Dental Association has advocated on your behalf as federal lawmakers debate the best way to respond to the deepening economic crisis caused by the COVID-19 outbreak. Congress is finalizing legislation that could support dentists during these exceptional circumstances.”
Dr. Gehani shared the provisions in the bipartisan legislation that the ADA believes are the most critical for dentists, dental students and dental practice employees. They are as follows:
Economic injury disaster loans. There are a number of Small Business Administration loans available to dentist owners. One loan, in particular, is the Economic Injury Disaster Loan, which establishes an emergency grant to allow a dental practice that applies for an Economic Injury Disaster Loan to receive an advance on that loan of no more than $10,000, which the Small Business Administration must distribute within three days.
The money may be used to pay for employees’ COVID-19-related sick leave, mortgage or rent, and other overhead expenses. The grants would be awarded on a first-come, first-served basis until the $10 billion fund is exhausted, and applicants would not have to repay the money even if they are denied the loan.
Loan forgiveness for certain small business loans. Employers may be eligible for a portion of their federal small business loans to be forgiven for amounts spent for certain payroll, sick leave, family leave and other overhead expenses between Feb. 15 and June 6.
Additional SBA loan payments. The Small Business Administration will pay the principal, interest and any associated fees that are currently owed on 7(a) loans, 504 loans and microloans. This would be for a six-month period starting on the next payment due date. Loans that are already on deferment would include an additional six months of payment by the Small Business Administration beginning with the next payment.
Retirement account withdrawals. The bill allows for a withdrawal of money from retirement funds of up to $100,000 in 2020 without paying a tax penalty if the dentist, their spouse or dependent are diagnosed with COVID-19, or experience adverse financial consequences as a result of being quarantined, furloughed, laid off or having work hours reduced due to the viruses.
Student loan interest deferral. Federal student loan borrowers would not be required to make a payment through Sept. 30. During this time, no interest would accumulate on those federal loans (payment suspension applies only to loans held by the Department of Education, not private loans).
Income tax break for some employees. Employee borrowers of student loans that receive assistance from their employers in paying off student loans will not have to pay income tax on any payment assistance, up to $5,250, they receive between the enactment of this law and Jan. 1, 2021.
Deferred Social Security tax. Employers and self-employed individuals would be allowed to defer payment of their employer share of the Social Security tax until Dec. 31.
Federal tax rebates. The bill provides for a one-time federal income tax rebate for eligible dentists and their employees in 2020. The rebate amount would be $1,200 for individual tax filers, $2,400 for those filing a joint return and $500 for each child. (The amount of the rebate will be reduced for single filers making more than $75,000 and joint filers earning in excess of $150,000.)
Increased unemployment benefits. Emergency unemployment compensation benefits will be dramatically increased should dental office employees be laid off. This is a supplement for state-funded unemployment insurance, with the federal enhancement being funded for four months.
Dr. Gehani concluded by urging all dentists to get in touch with their accountants to determine how they might benefit from taking advantage of them. And that once the bill has been signed into law, the ADA will provide a detailed account of all the provisions that affect dentistry.
"These are challenging times, but the ADA will continue to be a resource on important issues for you, your practice, and the profession," Dr. Gehani said. "This is uncharted territory for the entire dental community, but we will get through this together."
Visit ADA.org/virus for the latest ADA information on the coronavirus pandemic.
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