Updated 3/25/2019:
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
- Unemployment Qualification & Application
- Standby Unemployment
- Waiver of job search requirement
- Paying out accrued PTO/sick leave
- Working while on standby unemployment
- Impact on employer’s experience rating
- Continuation of medical insurance benefits
- Where to go for information
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
- Applicants may apply online, receive additional disaster assistance information and download applications at https://disasterloan.sba.gov/ela. Applicants may also call SBA’s Customer Service Center at (800) 659-2955 or email disastercustomerservice@sba.gov for more information on SBA disaster assistance.
- Loan based on need up to $2.0M; 3.75% interest; up to 30 year payback
- sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources
- business.wa.gov/site/alias__business/1563/sba-disaster-loans.aspx
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.
