COVID-19 Updates

Site: http://www.kewes.ky.gov/
Internet claim filing is listed at the top.

When to file:
Sunday A-D
Monday E-H
Tuesday I-L
Wednesday M-P
Thursday Q-U
Friday V-Z
Friday If you Missed your day

The Governor has stated that you will not be penalized for waiting until it’s your day.

If you are treated as a W2 employee in your practice you can file for Unemployment.  The Governor is working on the ability for independent contractors and Self Employed to be able to file for Unemployment as well.  Watch the state for information on that.

President Trump signed this bill into law on March 18^th, 2020. This bill expands your employees FMLA rights and paid sick leave starting April 1^st, 2020. Small employers that previously did not have to comply with FMLA are now required to meet new standards. This is a complex issue and we have been able to work with ChiroHealthUSA to bring you a webinar with the most current information on how this may impact your practice.

Click here to Watch CHUSA’s webinar replay.

The Small Business Association Economic Injury Disaster Loans (EIDL) and Loan Advance are available to businesses that have been impacted by COVID-19 (including Doctors of Chiropractic). This program includes an emergency advance of up to $10,000 to small businesses affected by COVID-19. To access the advance, you must first apply for an EIDL and then request the advance. Our research shows the advance does not need to be repaid, but you will verify that through this process. The funds may be used to keep employees on payroll, to pay for sick leave, meet increased production costs due to supply chain disruptions, or pay business obligations, including debts, rent, and mortgage payments. You may also qualify for funds above the emergency advance to help your practice. 

There is a lot of confusion about the types of loans available, and some think they must maintain their employees to be eligible. While this may be true for some loans, this advance and loan do not require you to keep your employees. This loan is to structured to give immediate assistance to businesses that have seen an economic impact due to COVID-19. You must qualify as one of the business types below and be able to certify the second list of criteria to be eligible.  

• Choose your business type:
  •Applicant is a business with not more than 500 employees.
  •Applicant is an individual who operates under a sole proprietorship, with or without employees, or as an independent contractor.
  •Applicant is a cooperative with not more than 500 employees.
  •Applicant is an Employee Stock Ownership Plan (ESOP), as defined in 15 U.S.C. 632, with not more than 500 employees.
  •Applicant is a tribal small business concern, as described in 15 U.S.C. 657a(b)(2)(C), with not more than 500 employees.
  •Applicant is a business, including an agricultural cooperative, aquaculture enterprise, nursery, or producer cooperative, that is small under SBA Size Standards
  •Applicant is a business with more than 500 employees that is small under SBA Size Standards
  •Applicant is a private non-profit organization that is a non-governmental agency or entity that currently has an effective ruling letter from the IRS granting tax exemption under sections 501(c),(d), or (e) of the Internal Revenue Code of 1954, or satisfactory evidence from the State that the non-revenue producing organization or entity is a non-profit one organized or doing business under State law, or a faith-based organization.
  
  
  
• Review and Check All of the Following, Applicant must review and check all the following: 
  •Applicant is not engaged in any illegal activity (as defined by Federal guidelines).
  •No principal of the Applicant with a 50 percent or greater ownership interest is more than sixty (60) days delinquent on child support obligations.
  •Applicant is not an agricultural enterprise (e.g., farm), other than an aquaculture enterprise, agricultural cooperative, or nursery.
  •Applicant does not present live performances of a prurient sexual nature or derive directly or indirectly more than de minimis gross revenue through the sale of products or services, or the presentation of any depictions or displays, of a prurient sexual nature.
  •Applicant does not derive more than one-third of gross annual revenue from legal gambling activities.
  •Applicant is not in the business of lobbying.
  •Applicant cannot be a state, local, or municipal government entity and cannot be a member of Congress.

Contact your accountant to see if a SBA EIDL is right for you. Or you can visit https://covid19relief.sba.gov/#/ for more information to start the application process.

There was an important section in the “Coronavirus Aid, Relief, and Economic Security Act” (CARES Act) passed by Congress last Friday (3/27/2020) that provides for SBA loans that ultimately can be forgivable. Most people refer to this section as the “Paycheck Protection Program.” At this point, the Small Business Administration (SBA) has until April 11 to establish the regulations or rules for this act, which will be necessary to answer some additional questions and to begin the loan application process. SBA is now indicating that applications will start being accepted on April 3rd.

These loans will have different requirements than those found in most SBA rules. Some requirements are more restrictive, and some are significantly loosened. The information below is based on our understanding of the law now and may be adjusted based on new information and the release of regulations by SBA. You will have to apply for this loan at a SBA approved bank. Contact your local bank to find out if they are an approved lender.

How the CARES loan different than typical SBA loans and the basic CARES loan requirements:

• Do NOT have to prove that you cannot receive credit from other sources. This is a typical SBA requirement, but it appears this has been removed for these loans.
• NO personal guarantee will be required.
  
• 100% guaranteed by the federal government.
  
• No federal government guarantee fees or prepayment fees.
  
• The borrower MUST make good faith certifications that they have been impacted by COVID-19 AND will use the funds to maintain payroll and other debt obligations. This language includes, i) “that the uncertainty of current economic conditions makes necessary the loan request to support the ongoing operations of the eligible recipient; (ii) acknowledging that funds will be used to retain workers and maintain payroll or make mortgage payments, lease payment, and utility payments”; and no other SBA loans applications are pending.
  
• Must have fewer than 500 employees.
  

Loan details:

• Funds must be used to cover payroll costs, benefits and leave, mortgage interest, rent, and utilities.
  
• Interest is capped at 4%.
  
• The borrower can defer payments (including the low interest) between 6-12 months.
  
• The amount of the loan can be up to the average monthly payroll from 2019 times 2.5 (i.e. 2019 total payroll expenses are $240,000, then 240,000/12 = 20,000 x 2.5 = $50,000 maximum). However, the loan amount is reduced by any amounts paid to individuals greater than $100,000.
  
• $1 million loan amount maximum.
  

Loan Forgiveness:

• Section 1106 of the Act, titled “Loan Forgiveness,” provides that the Government will forgive up to the original principal amount of a loan under the Act that a recipient can document was used to pay: (1) payroll costs; (2) mortgage interest; (3) rent and (4) utilities—in each case for up to eight weeks following the issuance of the loan. Additional details:
  

• Like the loan amount, the forgiveness will be proportionately reduced for salaries greater than $100,000.
  
• Each of these documented expenditures for utilities, lease payments, mortgage interest must have been in place prior to 2/15/2020 (i.e. no mortgage interest can be included if the mortgage began on 2/25/2020).
  
• The forgiveness is reduced proportionately based on that 8-week period vs. last year.
  
• Employees must remain employed through the end of June.
  
• Employee pay cuts greater than 25% will reduce the forgiveness proportionately.

Other FAQ:

• If you have already laid-off employees, you can re-hire them once the loan is disbursed and count them toward the calculation.
  
• The loan forgiveness is not taxable income.
  
• SBA has indicated they would have a process in place by the end of this week.
  
• They have indicated that they anticipate the loans MAY be able to be disbursed the same day. However, local banks may have a longer review process.
• It appears that you can apply NOW for an Economic Injury Disaster Loan Assistance (EIDLA) and then later apply for the Payroll Protection Program loan. You could choose which one to use OR re-finance the EIDLA loan into the PPP loan.

Next Steps:

What can you do now while waiting for the process to be finalized (i.e., for applications to be made available)?

Contact your accountant to see if the PPP is something that would benefit your practice. Start gathering documentation for the application while waiting for the process to finalize. This would include payroll information for 2019. This includes ALL payroll expenses, such as health benefits, retirement benefits, etc. Include everything, and you can negotiate with the bank as to what, if any, they will exclude. In addition to payroll information, gather documents showing mortgage interest, rent, and utilities in place prior to 2/15/2020.

Link to SBA site for Payroll Protection – they have now indicated applications can begin on April 3, 2020.