On Friday, President Trump signed the Paycheck Protection Program Flexibility Act (PPPFA) into law.  Let’s start with the To Do List based on the recently revised PPP rules:

PPP TO DO LIST (Updated after new rules enacted on 6/5/20):

  1. If you haven’t yet applied for the PPP Loan for your practice, please do so right away while there are still funds available. Under these revised rules, most practices should now qualify for full PPP forgiveness. Start with your current practice lender, but if they are slow to move, some of your colleagues found that PayPal was a quick and efficient option to get the PPP loan. More info is available at: https://www.loanbuilder.com/ppp-loan-support.
  2. Don’t rush to hire back staff members who aren’t essential to your practice right now, and instead, let them continue collecting unemployment. As your practice ramps up, you can rehire or replace those staff members that are still collecting unemployment. Remember, you now have until 12/31/20 to re-staff to 2/15/20 levels and still qualify for full PPP loan forgiveness. By keeping idle staff on unemployment will help maximize the PPP money available to pay those employees essential to the success of your practice right now.
  3. Consider keeping yourself on unemployment too.  When your practice revenue approaches pre-pandemic levels and is finally profitable once again, go off unemployment and start paying your salary from the practice at that time.  You now have 24 weeks to spend the PPP money on staff payroll, certain benefits, rent, and utilities and qualify for full forgiveness.
  4. Decide about deferring the employer match of your staff’s Social Security taxes. Practice owners are required to match the Social Security taxes withheld from their staff salaries at a rate of 6.2% on the first $137,700 paid to each employee in 2020, including the owners. Under the revised rules, even practices who got the PPP can defer remitting those matching Social Security taxes for the remainder of 2020 – paying 50% of the amount deferred by 12/31/21 and the remaining 50 percent by 12/31/22. No interest will be due on these deferred taxes. More info is available at: https://www.irs.gov/newsroom/deferral-of-employment-tax-deposits-and-payments-through-december-31-2020. Please notify my firm’s payroll team or your payroll processor if you will be taking advantage of this interest-free advance.
  5. Benefit from a very low interest rate loan to be paid back over 5 years. With the interest rate set at 1% and the repayment term now extended to five years, even if the full amount of the PPP loan isn’t forgiven you will be given very favorable terms to repay the remaining portion of your PPP Loan.

The timing of these rules couldn’t be better for Massachusetts doctors. With Phase 2 starting today (6/8), practice owners can now focus on rebuilding their practices without worrying about strategies to ensure full forgiveness of the PPP loan since full forgiveness is now almost guaranteed.