Q&A: Tips for How Therapists Can Use the Federal Stimulus Offerings

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9/12/22, 918 AM
Using Federal Stimulus for Addiction Therapy
Nashville TN
QA Tips for How Therapists Can Use the Federal
Stimulus Offerings
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Tips for How Therapists
We had so many questions come through for our
Tips for How Therapists Can Use the Federal
Stimulus Oflerings webinar that we couldnt get
to them all. Below weve compiled some additional
questions and answers from the webinar. We will
continue to update this information as more
details emerge.
PPP Loan For Therapists FAQs What does 2 1/2
times your W-2 mean in terms of the loan?
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The PPP loan is based on 2 1/2 times your
payroll, or if you are a sole proprietor,
is based on the average monthly net profit (line
31 on your Schedule C). Is it the 2019 tax
return needed or the 2018? Either one, but if you
havent done your 2019 taxes yet, in the context
of being ready for the application go ahead and
have your documentation prepared the banks are
likely going to ask for it. Do you have to
demonstrate loss of income as sole practitioner
therapists? We may not see that drop for month or
two? You do not have to have suffered a financial
impact in order to qualify. You being affected
by COVID-19 could even mean having to switch your
services to telehealth. What kind of accounting
is required if I want to sign up for the EIDL
instead of the PPP? Your bank should provide
guidance on what they are requiring to document
your calculation. I have an LLC partnership use
Schedule C to report income. I have no employees
other than myself. Would I be considered an
applicant with not more than 500 employees? Or
an applicant who is an individual who operates
under a sole proprietorship, with or without
employees? If you file Schedule C you would use
applicant who is an individual who operates
under a sole proprietorship, with or without
employees. For small business, self-employed
sole proprietors, that may have started up in
the last six months or so, the Schedule C for
2019 for that business may show a lot more
expenses vs. income, so the net income would be
less than the current monthly income and wont
reflect anticipated income for 2020. Any ideas on
how the PPP might do computations for new
businesses? The SBA should provide guidance to
the banks on what numbers to use in your
situation. You should be able to use 2020 numbers
if you just started this year.
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Your banker should be able to provide help on
that.
What about Subchapter S corporation? You would
file as a business and not as a sole
proprietor. Is it true that only 25 of the loan
can be used for rents, health insurance, etc.
and the other 75 must go to salaries and
wages? There is a calculation during the testing
period to determine how much of the PPP loan
can be forgiven. Generally that is the case, but
your CPA/bank will need to look at the details
on how to compute the forgiveness to be
sure. Will the forgiven loan amount then be
counted as taxable income on 2020 taxes? Our
understanding is that forgiveness on the PPP loan
will not be considered taxable income. Is
landlord/rental income protected by the PPP or
EIDL loans? Rental income is generally not
considered self employment income and cannot be
used in determining your amount of loan. Im not
clear how forgiveness is connected to a sole
proprietor. I have no employees. A few 1099s
but as you mentioned, they dont count. What
counts toward forgiveness for a self employed
sole practitioner? There has not been clear
guidance from the SBA on what they will look at
for sole proprietors during the testing period
to determine the loan forgiveness. This is why
we recommend pulling all your documentation so
you can be as prepared as possible. What is
there for solo practitioners without employees
who pay quarterly taxes but dont pay themselves
a specific salary, and income is way down due to
quarantine? You can apply for the PPP loan as a
sole proprietor you do not need to have
employees.
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It seems the SBAs Economic Injury Disaster Loan
(EIDL) also
provides vital economic support to any small
business (less than 500 employees) to help
overcome the temporary loss of revenue they are
experiencing as a result of the COVID-19 pandemic
without penalty. Why do you recommend applying
for the PPP instead? The EIDL package does/did
allow for up to 10,000 advance, however we
believe this advance would reduce any funds
received from the PPP advance though. Additionally
, as of Friday, April 10, 2020, the media has
been reporting that the EIDL program is running
out of funds and having significantly more issues.
We will keep you updated on the latest as new
information comes out. Keep checking back here
or feel free to reach out to us at
info_at_integrativelifecenter.com with additional
questions.
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