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Updated: 2/16/2021

Under the CARES Act, employers who received a PPP loan were not eligible for the Employee Retention Tax Credit (ERTC).  This qualification was repealed with the Consolidated Appropriation Act of 2021.  Below is a summary of the key provisions of the credit, reflecting changes made by the new law:

Time period credit is available

  • Qualified wages paid after March 12, 2020, and before July 1, 2021

Eligibility requirements for 2020

  • Applies to wages paid by a business with operations that were either fully or partially suspended by a COVID-19 governmental order and only for wages paid during the period the order is in force;

OR

  • Applies to wages paid during 2020 beginning with the any quarter where gross receipts were less than 50% of gross receipts for the same quarter in 2019, and including each subsequent quarter until after the quarter in which gross receipts are greater than 80% of gross receipts for the same quarter in 2019.

Eligibility requirements for 2021

  • Applies to wages paid by a business with operations that were either fully or partially suspended by a COVID-19 governmental order and only for wages paid during the period the order is in force;

OR

  • Applies to wages paid during the first two quarters of 2021 where gross receipts are less than 80% of gross receipts for the same quarter in 2019 (or 2020 if not in business in 2019).

Amount of credit

  • 2020 – Credit is 50% of qualified wages paid to an employee, plus the cost to continue providing health benefits to the employee.  Annual cap of $5,000 per employee.
  • 2021 – Credit is 70% of qualified wages paid to an employee, plus the cost to continue providing health benefits to the employee.  Quarterly cap of $7,000 per employee for each of the first two quarters of 2021 for a possible $14,000 credit per employee.  The 2021 credit is available even if the employer received the $5,000 credit for wages paid to such employee in 2020.

Size of employer

  • 2020 – A company with 100 or fewer full-time equivalent employees is eligible for the credit, whether or not the employee was working.  A company with more than 100 employees can only take the credit for wages paid to an employee who is not working.
  • 2021 – A company with 500 or fewer full-time equivalent employees is eligible for the credit, whether or not the employee was working. 

PPP loan interplay

  • Employers that received a PPP loan in 2020 are now eligible to take the ERTC, so long as the same wages are not used for both the credit and PPP loan forgiveness.  In other words, if there were wages paid during the PPP loan 24-week period that exceed the amount needed to achieve 100% PPP loan forgiveness, then these additional wages can be used for the ERTC as long as the business otherwise qualifies for the credit.

Kevin manages marketing & business development at Dental Accounting Professionals LLC.

Follow Kevin J. Bray on LinkedIn

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Updated: 1/7/2021

As you may have already heard, the newest round of COVID-19 Stimulus was signed into law on December 27th, 2020. The new Act created another PPP loan opportunity for qualifying businesses. We believe many dental clinics will qualify for a second forgivable PPP loan. The new SBA & Treasury interim guidance was released late last night, January 6th, 2021. Some key points regarding the Second Draw PPP Loan:

  • Must have fewer than 300 employees
  • Maximum loan amount will be $2 million
  • Must have had a reduction of 25% or more in gross receipts (see information below regarding gross receipts) in any one quarter in 2020 over that same quarter in 2019. Most dental clients should be able to qualify with Q2 2020 vs Q2 2019.
  • Has used, or will use, the full amount of its First Draw PPP Loan on or before the expected date on which the Second Draw PPP Loan will be disbursed
  • Business has been in operation by Feb 2020 or earlier (start-ups in Q1 2020 would compare Q2, Q3 or Q4 2020 to Q1 2020 gross receipts to calculate the 25% reduction requirement)
  • Deadline to apply: March 31, 2021

I recommend you REACH OUT TO THE LENDER WHO HELPED WITH YOUR PPP ROUND 1 if you have not done so already. They will help you through the process to determine if you qualify. If you need a referral to a local lender, please let us know and we will introduce you to a few contacts who have been amazing to work with.

21 Ppp Round 2 Timeline Aicpacapture

One concern that we have been discussing with our banking & legal network is what is considered “Gross Receipts.” Some dentists received sizable grants (including the HHS stimulus) during the mandated Q2 2020 shutdowns, which in some cases have increased the total income above the 25% reduction qualification. The amount of any forgiven First Draw PPP Loan shall not be included toward any borrower’s gross receipts test, however, grant money/HHS stimulus may count as gross receipts per the SBA & Treasury guidance released last night.

Per the SBA and Treasury guideline:

Ҥ 121.104 РHow does SBA calculate annual receipts?

(a) Receipts means all revenue in whatever form received or accrued from whatever source, including from the sales of products or services, interest, dividends, rents, royalties, fees, or commissions, reduced by returns and allowances. Generally, receipts are considered “total income” (or in the case of a sole proprietorship “gross income”) plus “cost of goods sold” as these terms are defined and reported on Internal Revenue Service (IRS) tax return forms (such as Form 1120 for corporations; Form 1120S for S corporations; Form 1120, Form 1065 or Form 1040 for LLCs; Form 1065 for partnerships; Form 1040, Schedule F for farms; Form 1040, Schedule C for other sole proprietorships). Receipts do not include net capital gains or losses; taxes collected for and remitted to a taxing authority if included in gross or total income, such as sales or other taxes collected from customers and excluding taxes levied on the concern or its employees; proceeds from transactions between a concern and its domestic or foreign affiliates; and amounts collected for another by a travel agent, real estate agent, advertising agent, conference management service provider, freight forwarder or customs broker. For size determination purposes, the only exclusions from receipts are those specifically provided for in this paragraph. All other items, such as subcontractor costs, reimbursements for purchases a contractor makes at a customer’s request, investment income, and employee-based costs such as payroll taxes, may not be excluded from receipts.” 

Links to Source Documents:

https://home.treasury.gov/system/files/136/PPP-IFR-Second-Draw-Loans.pdf

https://www.journalofaccountancy.com/news/2021/jan/sba-treasury-issue-ppp2-guidance.html

https://home.treasury.gov/system/files/136/PPP-IFR-Paycheck-Protection-Program-as-Amended-by-Economic-Aid-Act.pdf

Please contact Kevin Bray at Dental Accounting Pros as questions arise.


Kevin manages marketing, business development, and customer success for Dental Accounting Professionals LLC & Benton Bray PLLC. He is highly analytical, creative, and forward thinking in his approach to working with clients. His background is in commercial real estate with a focus in dental office leasing and investment sales. Kevin’s passionate about investing for the future and implementing new technologies to streamline outdated workflow processes to increase bottom line results.  

Follow Kevin J. Bray on LinkedIn

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Updated 12/11/2020:

As we have been working through 2020 tax projections with clients, we are seeing many offices have higher taxable income and tax liabilities over 2019 performance, despite the COVID shutdown. This is somewhat counter to expectations and a surprise to some practice owners. The causes for the added income are the PPP funds, the HHS Provider Relief Funds and other grant funds – all adding to taxable income. Tax mitigation with charitable giving, equipment purchases & retirement plans should be part of the conversation today. If your tax advisor is not going through a tax planning exercise now, you may be in for a surprise come April 2021.

We want to give the Washington Academy of General Dentistry a special thanks for all of their hard work during this ongoing pandemic. They went above and beyond during the mandated COVID shutdown this year by providing virtual CE for free to dentists across the country. They dedicated a huge amount of time and resources towards serving the needs of the industry during a time of great uncertainty. The wealth of information the AGD broadcast was invaluable. We participated in that cause to provide insight from our CPA team on the CARES Act, PPP Loans and additional stimulus for dentists. We saw firsthand how much effort the team at the Washington AGD put forth. A round of applause for the AGD team and volunteer colleagues that did a fantastic job. As you know, the WAGD is a non-profit organization. That means your donations to the AGD are tax deductible. The AGD needs our support now more than ever! So please consider a donation to your association and get a bonus tax deduction.

Temporary suspension of limits on charitable contributions in 2020 as part of the CARES Act

If you take the standard deduction on your 2020 tax return (the one that you’ll file in 2021), you can claim a brand new “above-the-line” deduction of up to $300 for cash donations to charity you make this year. Normally, you would have to itemize on Schedule A to get a tax break for charitable donations.

If you itemize deductions on your tax return, you can claim a deduction for your charitable donations. However, the amount you can deduct for cash contributions is generally limited to 60% of your adjusted gross income (AGI). Any cash donations over that amount can be carried over for up to five years and deducted later. The CARES Act lifts the 60% of AGI limit for cash donations made in 2020 (although there’s still a 100% of AGI limit on all charitable contributions). That means itemizers can deduct more of their charitable cash

contributions this year. If your taxable income is higher than expected, consider bunching (pre-paying) some of your 2021 charitable donations into 2020.

Equipment Purchases

The various depreciation rules available to business owners allows for the rapid deduction of capital expenditures for equipment and office remodels by permitting the entire write-off of the capital investment, even if financed. The trigger for the write-off is getting the asset in-service by year-end. If your practice is in need of some equipment upgrades or added technology, make those investments and get the new equipment delivered and installed by year-end for an immediate tax write-off.

Additional Retirement Planning with a Cash-Balance 401k

If you are a high-income practice owner and want to accelerate your retirement saving plans (and save even more on taxes!), this is a strategy to consider. With a traditional 401k/401k profit sharing plan, your contributions are capped at $57,000 (or $63,500 if age 50 or older). With a cash-balance 401k your contribution limit is significantly increased. It’s based on an actuarial calculation, but in many cases an owner can contribute over $150k+ each year. Remember, this is a pre-tax contribution! The deadline to setup a Cash-Balance 401k plan for tax year 2020 has been extended because of COVID. Traditionally you had to have the plan formed by the end of the calendar year. Now you have until the due date of your tax return (including extensions). You also do not have to fund the contributions until the extended due date of your return (September 15th or October 15th, 2021). This allows ample time to plan and set money aside with future cash-flow and get a 2020 tax deduction.

In conclusion, every practice owner should be setting aside time now to act on tax mitigation strategies. This year has proven to be hard for business owners across the country, but especially for non-profits since the traditional fundraising events have been cancelled. Remember to support your local charities & non-profits (including the Washington AGD)!


Kevin manages marketing, business development, and customer success for Dental Accounting Professionals LLC & Benton Bray PLLC. He is highly analytical, creative, and forward thinking in his approach to working with clients. His background is in commercial real estate with a focus in dental office leasing and investment sales. Kevin’s passionate about investing for the future and implementing new technologies to streamline outdated workflow processes to increase bottom line results.  

Follow Kevin J. Bray on LinkedIn

Since March 17th, we have been proactively distributing information to our clients and the larger dental community through our partnership with the Washington Academy of General Dentistry.

We’ve invested thousands of dollars worth of our billable hour time on these webinars. Our team has read the 800+ page CARES Act statute and additional SBA & Treasury Department guidance as it becomes available. We’ve held numerous meetings and discussions internally and externally with industry attorneys and bankers. We are working hard to help our clients navigate this crisis. Information changes every week as more guidance from the SBA & Treasury Department gets released.

Here are links to our previous webinars and Prezi presentations regarding the CARES Act.

PPP Loan Forgiveness and New SBA Guidance

June 3rd, 2020

Prezi Presentation Link: https://prezi.com/view/apu3WGxEFH7ILNU1WwdD/


COVID-19 Update on Relief Provisions

May 6th, 2020

Prezi Presentation Link: https://prezi.com/view/d7Pt2asv3F75UPo4QGBX/ 5/6/2020


Covid-19 Update

April 15th, 2020

Prezi Presentation Link: https://prezi.com/view/jj3dXPtPAn8ySuRnBCMK/


Cares Act – Major COVID Relief

April 1st, 2020

Prezi Presentation Link: https://prezi.com/view/GG9AuKG8AICpCDs5bpIq/


COVID-19: Employee & Business Implications for Practice Owners

March 26th, 2020

Prezi Presentation Link: https://prezi.com/view/h3jjQHcMIBnYnKV0ZuFr/

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Updated 5/6/2019:

Disclaimer: What follows next is general information and not legal or accounting advice. We are not your attorney or CPA and every situation is different. You should call your attorney or CPA for specific advice with regards to the topics of this presentation. If you are not receiving the guidance you need, we can entertain bringing you on as a paying client. 

Since our last update on April 15, 2020, we have received additional guidance from the Treasury Department & SBA in regards to PPP loans and state governments across the country are outlining phased opening of the economy.

Today we are going to cover:

A. Paycheck Protection Program Loans: Additional Regulatory Guidance
B. Paycheck Protection Program Loans: Forgivable Loan Calculations
C. Unemployment Benefits for Owners and Self-Employed: Dealing
with Application Headaches
D. Getting Back in Business: Covid 19 Safety Protocols & Overcoming
Patient’s Safety Concerns



Source Document Links & Additional Information:

Link to Prezi presentation: https://prezi.com/view/d7Pt2asv3F75UPo4QGBX/


Kevin manages marketing, business development, and customer success for Dental Accounting Professionals LLC & Benton Bray PLLC. He is highly analytical, creative, and forward thinking in his approach to working with clients. His background is in commercial real estate with a focus in dental office leasing and investment sales. Kevin’s passionate about investing for the future and implementing new technologies to streamline outdated workflow processes to increase bottom line results.  

Follow Kevin J. Bray on LinkedIn

Updated 4/15/2019:

Disclaimer: What follows next is general information and not legal or accounting advice. We are not your attorney or CPA and every situation is different. You should call your attorney or CPA for specific advice with regards to the topics of this presentation. If you are not receiving the guidance you need, we can entertain bringing you on as a paying client. 

Since our last update on April 1, 2020, the CARES Act PPP loan program has launched and we have received additional guidance from the Treasury Department.

Today we are going to cover:

A. Paycheck Protection Program (PPP) Loans
B. Unemployment Benefits for Owners
C. EIDL Grants
D. Extended Tax Deadlines
E. General Update on: Retirement Plan Distributions, Status of
Add-On Relief Legislation, and When Will Businesses Reopen



Source Document Links & Additional Information:

Link to Prezi presentation: https://prezi.com/view/jj3dXPtPAn8ySuRnBCMK/


Kevin manages marketing, business development, and customer success for Dental Accounting Professionals LLC & Benton Bray PLLC. He is highly analytical, creative, and forward thinking in his approach to working with clients. His background is in commercial real estate with a focus in dental office leasing and investment sales. Kevin’s passionate about investing for the future and implementing new technologies to streamline outdated workflow processes to increase bottom line results.  

Follow Kevin J. Bray on LinkedIn

Updated 4/1/2019:

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Disclaimer: What follows next is general information and not legal or accounting advice. We are not your attorney or CPA and every situation is different. You should call your attorney or CPA for specific advice with regards to the topics of this presentation. If you are not receiving the guidance you need, we can entertain bringing you on as a paying client. 

Since our last update on March 25, 2020, the CARES Act was passed and signed into law late on March 27, 2020 and the Department of Labor has issued additional guidance on implementation of the Families First Coronavirus Response Act (FFCRA).

Today we are going to cover:

A. Recap of FFCRA and DOL Guidelines
B. Recap of Standby Unemployment
C. SBA Disaster Assistance Loan program
D. CARES Act – Paycheck Protection Program loans (Forgivable Loans)
E. CARES Act – Unemployment Assistance
F. Emergency EIDL Grant



Source Document Links & Additional Information:

Link to Prezi presentation: https://prezi.com/view/GG9AuKG8AICpCDs5bpIq/


Kevin manages marketing, business development, and customer success for Dental Accounting Professionals LLC & Benton Bray PLLC. He is highly analytical, creative, and forward thinking in his approach to working with clients. His background is in commercial real estate with a focus in dental office leasing and investment sales. Kevin’s passionate about investing for the future and implementing new technologies to streamline outdated workflow processes to increase bottom line results.  

Follow Kevin J. Bray on LinkedIn


Updated 3/25/2019:

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COVID-19: Employee & Business Implications for Practice Owners

Disclaimer: What follows next is general information and not legal or accounting advice. We are not your attorney or CPA and every situation is different. You should call your attorney or CPA for specific advice with regards to the topics of this presentation. If you are not receiving the guidance you need, we can entertain bringing you on as a paying client. 


Covid-19 Update: Employee& Business Implications for Practice Owners

Employee Issues

Disaster Relief Payments under Sec 139 [Seek the advice of your tax adviser!]

  • General rule – gross income shall not include any amount received by an individual as a qualified disaster relief payment but remain 100% deductible by the business.
  • In IRS Notice 2020-18, the IRS stated that the President’s emergency declaration constituted a federally declared disaster for purposes of Section 165. Thus, the COVID-19 pandemic satisfies the requirement in Section 139 for a federally declared disaster.
  • As a result, beginning immediately, employers may provide tax-free payments to employees — while still claiming a full deduction for the payments — provided the payment is to reimburse or pay the employee for “reasonable and necessary personal, family, living, or funeral expenses” incurred as a result of COVID-19.
  • Payments are NOT covered by Section 139 if they compensate employees for expenses that are otherwise compensated for by insurance or that are intended to replace lost income. Thus, payments pursuant to the Families First Coronavirus Response Act for sick pay or family medical leave remain fully taxable to the employee.
  • There is no IRS Regulatory guidance and very little professional commentary regarding Disaster Relief Payments under Sec 139 so seek professional advice.

IRS filing and paying tax extension

  • The Treasury Department and Internal Revenue Service announced March 20, 2020 that the federal income tax filing due date is automatically extended from April 15, 2020, to July 15, 2020.
  • Federal income tax payments due on April 15, 2020 are also extended to July 15, 2020, without penalties and interest, regardless of the amount owed. This deferment applies to all taxpayers, including individuals, trusts and estates, corporations and other non-corporate tax filers as well as those who pay self-employment tax. The extended April 15, 2020 tax payments include any 2019 tax balance due and your 2020 first quarter estimated tax payment.
  • Taxpayers do not need to file any additional forms or call the IRS to qualify for this automatic federal tax filing and payment relief. 

Department of Revenue filing and paying tax extension

  • The Dept of Revenue has implemented emergency measures to provide relief to all Covid-19 impacted businesses. These measures are in effect from February 29, 2020 through the end to the state of emergency (yet to be determined).
  • For monthly filers, a 60 day extension is available to file and pay the State taxes on all Combined Excise Tax returns due during the state of emergency period.
  • For quarterly filers, your Q1/2020 Combined Excise Tax return that is normally due April 30th can be extended 30 days until May 30, 2020.
  • Relief applies to all taxes reportable on your Combined Excise Tax Return for returns that are due and not already paid during the state of emergency.
  • Request extension relief online by submitting a secure message in your myDOR account (secure.dor.wa.gov/home/login). Indicate your reason for requesting an extension such as Covid-19 temporary business closure and include reference to you UBI number. We have been advised by DOR that extensions are approved automatically.  You will be notified in a few days of the approval.
  • Alternatively you can request extension relief by calling DOR at 360-705-6705.

Families First Coronavirus Response Act (see addendum)

  • Family and medical leave
  • Emergency paid sick time

SBA Disaster Assistance Program

Federal Relief Legislation

    • Trillion $$$ relief bill in process
    • Substantial small business and employee relief expected
    • Stay tuned…

Business interruption insurance

  • Preliminary indications are “no”
  • Check with your insurance broker and ask for an opinion from the carrier
  • Congress may intervene to broaden the definition of what constitutes a triggering event for business interruption coverage

Lender assistance

  • Dental lenders across the board have really stepped up to provide emergency relief
  • Up to 90 day loan deferrals
  • Emergency lines of credit

Landlord Assistance

  • Review your lease and consult with your attorney
  • Force majeure clause – “Act of God”
  • Negotiate for lease deferral

Delta Dental Financial Support

  • Independent Dental Practice Reimbursement Advance Program (RAP)
    • The RAP will begin to advance payments of clinical reimbursements for an eight-week period that begins within one to two weeks of the application approval (approval should take approximately one week).
    • Weekly advances will supplement any ongoing reimbursement payments.
    • Advances will equal 25% of the average weekly DDWA clinical reimbursement payments made to the practice’s Tax Identification Number (TIN) during 2019. The cumulative advances to any one TIN will not exceed $25,000.
    • The cumulative advance will be repaid without any interest by the receiving practice in 20 equal weekly payments to DDWA beginning July 1, 2020.
  • Independent Dental Practice Assistance Fund (DAF)
    • Grant up to a max of $15,000

Amazon Neighborhood Small Business Relief Fund

  • Businesses in Bellevue, Wash. and the South Lake Union and Regrade neighborhoods of Seattle — particularly those that rely on foot traffic — can apply online for a grant from Amazon’s $5 million fund. Amazon will determine on a case-by-case basis the amount of the grant your business qualifies for. Only businesses with 50 employees or less, or that take in less than $7 million in annual revenue, qualify.

Facebook Small Business Grants Program

  • Facebook has committed to offering up to 30,000 small businesses $100 million in cash grants and Facebook advertising credits. The grants will be provided to businesses in more than 30 countries. Information is limited, but sign up to get more details from the company when they’re available.

Preparing for getting back to work

  • Managing cash flow
  • Continuing the admin function
  • Billing & collections
  • Re-booking appointments and filling the schedule
  • Implement best practices
  • Deep clean and organize entire clinic
  • Work on business plan and strategies

Source Document Links & Additional Information:

Link to Prezi presentation: https://prezi.com/view/GG9AuKG8AICpCDs5bpIq/


Kevin manages marketing, business development, and customer success for Dental Accounting Professionals LLC & Benton Bray PLLC. He is highly analytical, creative, and forward thinking in his approach to working with clients. His background is in commercial real estate with a focus in dental office leasing and investment sales. Kevin’s passionate about investing for the future and implementing new technologies to streamline outdated workflow processes to increase bottom line results.  

Follow Kevin J. Bray on LinkedIn