If your practice received a Provider Relief Fund Grant from HRSA of more than $10k, you are required to self-report that you utilized those funds properly. On 6/11/21, the Health Resources and Services Administration (HRSA) issued guidance available at: https://www.hhs.gov/sites/default/files/provider-post-payment-notice-of-reporting-requirements-june-2021.pdf
The table below summarizes the deadline to use the funds as well as the reporting time period. Please note that most of our clients received the Provider Relief Fund (PRF) subsidy between 7/1/20 and 12/31/20. Some medical practices received their PRF Subsidy between 4/10/20 and 6/30/20.
Grant recipients will self-report data in the following order:
- Interest earned on PRF Payments – if the funds were held in an interest-bearing account
- Other assistance received – including PPP loans, state grants, and other COVID related assistance
- Use of PRF subsidies – not reimbursed by other grants received
- Break down of expenses between General and Administrative and/or other Health Care-Related Expenses
- Lost Revenue Reimbursement – unallocated PRF money can be applied to lost revenue
You can access the Provider Relief Fund Reporting Portal at: https://prfreporting.hrsa.gov/s/. The first step is to register to set up your account. If we’ll be filing the self-reporting application for you, please let us register on your behalf as we will use a common email address for each client. Our fee will be $500 to assist with the self-reporting application. Please email email@example.com to let us know if you want our help with this.
For additional info, the Provider Relief Fund (PRF) Reporting Portal FAQs are available at: https://hrsac19.my.salesforce.com/sfc/p/#t00000004XgP/a/t0000001FId8/wN.4dTa.NRiNhwh_0CBblH6gvvedhqOt7_.5OS7rP6U
The Employee Retention Tax Credit (ERTC) has had quite a journey since first being introduced as part of the CARES Act last March. Originally, business owners who took the PPP Loan weren’t eligible for this valuable payroll tax credit.
That all changed in December when Trump signed his stimulus package into law. Suddenly, anyone who received a PPP Loan could ALSO amend their 941 payroll tax forms to receive the ERTC, provided their practice was either closed due to a government mandate or saw its revenue in a 2020 calendar quarter decrease by 50% or more from the same quarter of 2019. Practice with a decrease of 20% of more in a 2021 calendar quarter as compared to the same quarter in 2019 also qualify. Most of our healthcare clients qualify for the ERTC.
Biden made the ERTC even more valuable when he signed the March 2021 stimulus bill into law.
For a summary of the current set of ERTC rules:
Applying for the ERTC is pretty complicated. For starters, you will need to go to your QBO to see which quarters you qualify for this payroll tax credit. You will then coordinate the wages you claim for this credit with the minimum amount of wages utilized for the PPP Loan Forfeiture application. Lastly, you need to prepare and file Amended 941 Forms, which is a payroll tax form filed quarterly with the IRS.
We’ll be reaching out to our clients soon to offer assistance with filing for the Employee Retention Tax Credit. If you would like our assistance to file for the ERTC, please email us at firstname.lastname@example.org.
On March 11, 2021, President Biden signed the $1.9 Trillion American Rescue Plan Act of 2021 into law. ARPA included a provision expanding the Employee Retention Tax Credit (ERTC) to include “Recovery Startup Businesses (RSB)” – those that opened after 2/15/20 with annual revenue of less than $1 Million.
The ERTC for RSB’s is only available for Q3 and Q4 of 2021 and is equal to 70% of the first $10k paid to each employee per quarter, capped at $50k per quarter. And unlike established businesses, an RSB does not need to show a decrease in revenue or being impacted by a government shutdown to qualify.
It appears that eligible startup businesses will claim this valuable tax credit just by checking a box that will be available on their Q3 and Q4 quarterly payroll tax filing Form 941. The IRS recently issued guidance for this valuable payroll tax credit at: https://www.irs.gov/instructions/i7200.
Just a reminder that if your practice had a 401k/Profit Sharing Plan in place during 2020, you are required to file a Form 5500 by 7/31/21 (https://www.dol.gov/sites/dolgov/files/EBSA/employers-and-advisers/plan-administration-and-compliance/reporting-and-filing/form-5500/2019-sf.pdf). If you aren’t able to submit this paperwork prior to 7/31, please file for an extension using the Form 5558, https://www.irs.gov/pub/irs-pdf/f5558.pdf, giving yourself until 10/15 to file.
There are no taxes due with this form. Instead, the 5500 is an informational filing only. Practices with SEPs and SIMPLEs are exempt from this annual filing requirement.
While no taxes are due, the PENALTIES FOR FILING THE FORM 5500 LATE ARE DISGUSTING – A WHOPPING $250 PER DAY!!! Learn more at: https://www.irs.gov/retirement-plans/increased-penalties-for-failure-to-file-retirement-plan-returns.
As a practice owner with a retirement plan, it’s up to you to follow up with your TPA to be completely sure that all the filing deadlines are met. No one is certain how flexible the IRS will be to reduce or waive this onerous late filing penalty. Please do what you can to not need to find out.
Remember, no one cares more about your practice avoiding this $250 per day late-filing penalty than you do.
Taxpayers who received unemployment benefits during 2020 could exclude the first $10,200 of benefits received from their taxable income as long as their total income reported on their tax returns was less than $150,000. This rule wasn’t enacted until March causing eligible taxpayers who filed their returns prior to mid-March 2021 to miss out on this tax break. More info on this opportunity is available at: New Exclusion of up to $10,200 of Unemployment Compensation | Internal Revenue Service (irs.gov)
If you paid federal taxes on up to $10.2k of 2020 unemployment benefits that should have been tax-free, please hold off amending your tax return at this time. Instead, as stated on the IRS website:
“Because the change occurred after some people filed their taxes, the IRS will take steps in the spring and summer to make the appropriate change to their return, which may result in a refund. The first refunds are expected to be made in May and will continue into the summer.
For those taxpayers who already have filed and figured their tax based on the full amount of unemployment compensation, the IRS will determine the correct taxable amount of unemployment compensation and tax. Any resulting overpayment of tax will be either refunded or applied to other outstanding taxes owed.
For those who have already filed, the IRS will do these recalculations in two phases, starting with those taxpayers eligible for the up to $10,200 exclusion. The IRS will then adjust returns for those married filing jointly taxpayers who are eligible for the up to $20,400 exclusion and others with more complex returns.”
Therefore, no federal amended tax return is necessary. However, if your reduction in taxable unemployment benefits impacts other tax credits, you will need to amend your federal tax return. Please contact your tax preparer if you received an automatic federal refund for the unemployment exclusion to confirm whether there is any additional impact on your federal taxes. Additionally, your tax preparer can follow up with your specific state’s rules to determine if amending your state income tax return may be necessary.
With regard to this refund, if a taxpayer’s bank information is included on the 2020 federal tax return, then the refund will be paid via direct deposit. Otherwise, a check will be mailed to the taxpayer’s address per the tax return filed for 2020. Additionally, taxpayers will receive a notice from the IRS explaining the adjustments.
If you have filed your tax return and are waiting on your refund, you can get an update on the status of the processing of your federal tax return by going to the IRS link: https://www.irs.gov/refunds and clicking on the Check My Refund Status button.
Be prepared to provide the following information:
- Your social security number
- Your filing status
- Your exact refund amount
Once input, this link provides the status of whether or not your federal tax return has been processed and if so, the anticipated date of refund or the date the refund was sent. The IRS updates this site once daily.
Taxpayers can also check on the status of their recently filed amended returns as well using this link https://www.irs.gov/refunds