AOA is closely monitoring developments and actively providing updates regarding COVID-19 for doctors of optometry and patients.
PPP loan program gives small business exclusive application window
Small businesses with fewer than 20 employees will take priority among Paycheck Protection Program (PPP) loan applications over the course of the next two weeks after temporary changes announced by President Biden’s administration.
From 9 a.m. ET, Wednesday, Feb. 24 through 5 p.m. ET, Tuesday, March 9, such businesses will receive exclusive priority access to apply for the federal aid. Additionally, the administration looks to expand PPP access to underserved businesses by revising eligibility for sole proprietors and those in low-and-moderate-income areas.
The Small Business Administration notes that applications submitted by larger businesses prior to Feb. 24 will continue to be processed with no delay and these businesses will still have until March 31 to submit applications before the program expires.
To learn more about “second draw” PPP loans, including eligibility requirements, application process, how funds can be used and more, AOA members can access the #AskAOA PPP Funding Opportunities, First and Second Draw PPP Options webinar.
The deadline for both first and second draw PPP loan applications is March 31, 2021. Access the loan forgiveness application for PPP loans of $50,000 or less and the application for PPP loans of $150,000 or less.
For an in-depth explanation of “second draw” PPP loans, including eligibility requirements, the application process, how funds can be used and more, AOA members can access the recent #AskAOA COVID Relief Update—PPP Second Draw webinar available on EyeLearn (login required).
Note: Forgivable PPP loans will no longer be considered taxable income after Congress overturned a prior IRS decision. Please direct questions to firstname.lastname@example.org.
HHS delays reporting requirements for Provider Relief Funds
Recipients of Provider Relief Fund payments exceeding $10,000 in aggregate will eventually report requisite information to HHS via a reporting portal opened Jan. 15, 2021; however, at this time, HHS opened the portal only for registration purposes to prepare physicians to report at a later date.
The AOA anticipates HHS will also delay the original Feb. 15, 2021, deadline to report, though it is important that doctors continue tracking how funds have been spent and be prepared to report at a later date.
The HHS offers guidance on how to prepare for reporting and also offers several FAQs on the process. If you have questions regarding the reporting process, the AOA can work to gather additional information from the HHS. Please send specific reporting questions to email@example.com or reach out directly to HHS by calling the Provider Support Line at 866.569.3522 (TTY dial 711).
COVID-19 aid, spending package overturns IRS’ PPP loan tax decision
Forgivable Paycheck Protection Program (PPP) loans will no longer be considered taxable income for optometry practices after the AOA’s advocacy into Congress’ year-end COVID-19 aid and spending bill overturned a prior IRS decision to the contrary.
In guidance issued by the IRS and Treasury Department on Jan. 6, eligible expenses that would result (or expected to result) in the forgiveness of a PPP loan will now be deductible. The ruling reflects changes to law contained in the COVID-related Tax Relief Act of 2020, the IRS notes, enacted as part of the $2 trillion+ aid and government funding package signed into law on Dec. 27, 2020.
Previously, the IRS ruled that normally deductible business expenses could not be deducted if paid for with a PPP loan that is subsequently forgiven, effectively creating a situation where the tax-free loan created taxable income for 2020. The AOA and a coalition of 500 stakeholders argued the IRS misinterpreted Congress’ intent of the tax-free loans provided for by the CARES Act and urged Congress to rectify the contradiction.
For more information about these changes, visit IRS.gov.
Federal COVID-19 sick leave requirements lapse, tax credit offered
Employers are no longer required by federal law to provide eligible employees paid leave for reasons related to the COVID-19 pandemic, though a refundable tax credit remains available to subsidize the cost of business if employers provide paid leave through March 31, 2021.
Previously, the Families First Coronavirus Response Act (FFCRA) mandated that employers provide Emergency Paid Sick Leave and Expanded FMLA to eligible employees unable to work for reasons related to the pandemic, such as sickness or related childcare needs. The FFCRA requirements expired on Dec. 31, 2020, and were not extended in the $900 billion COVID-19 relief bill signed by President Trump on Dec. 27.
The Department of Labor’s Wage and Hour Division (WHD) offers an FAQ with guidance on how this affects employers and employees.
Additionally, the Consolidated Appropriations Act (CAA) 2021 extended employer tax credits for paid sick leave and expanded FMLA voluntarily provided to employees until March 31. However, the CAA did not extend employees’ entitlement to FFCRA leave beyond Dec. 31, 2020, meaning employers are no longer legally required to provide such leave, the WHD notes.
Although Congressional action staved off an immediate 2% cut to providers’ Medicare payments this year, attention now shifts to additional cuts mandated by federal spending controls.
Even as doctors of optometry receive the much-needed funds, the AOA remains committed to advocating for optometry’s inclusion in federal crisis measures. Reminder: the deadline to apply for relief has been extended to May 31.
May 31 is the new application deadline for first- and second-draw PPP loans, with the AOA requesting clarity on whether HHS Provider Relief Funds should be included in gross receipts for assessing eligibility.