How the new stimulus package will help practices
Congress passed a $900 billion COVID relief bill and stimulus package on December 21, less than two weeks before several key aid programs in the original Coronavirus Aid, Relief, and Economic Security (CARES) Act were set to expire. The CARES Act includes a number of provisions—such as pandemic-related jobless assistance measures and eviction protections—that may seem like a last-minute holiday gift for many.
“The package will offer additional loans to businesses [with] fewer than 300 employees that have seen drops in income during the third quarter of 2020,” Kellie Olah, CVMP,SPHR, SHRM-CP, a consultant with Veterinary Business Advisors, told NEWStat.
“Many practices received a Paycheck Protection Program [PPP] loan [in spring], which helped initially, but that money is long gone now,” Olah added. “Hopefully, the additional stimulus will help those practices push through these hard times so they can keep the doors open.”
The bill also includes a fix for a controversial IRS tax that prohibited PPP loan recipients from deducting ordinary business expenses that were paid with funds obtained through the loan, which means that up to 40% of the amount of a PPP loan stays within the veterinary practice instead of going to taxes.
Further, the bill will streamline PPP loan forgiveness for loans of up to $150,000. Most veterinary practices should qualify for this simplified process because, according to the AVMA, more than 80% of the PPP loans obtained by veterinary practices fall below that threshold.
Other provisions of the 5,600-page bill include:
- Up to $20 million for animal health infrastructure’s role in the COVID-19 response
- Funding for key federal programs important to veterinary medicine
- Unemployment insurance benefits until March 14, 2021
- A second stimulus check of $600 for qualifying adults, $1,200 for couples filing jointly, and $600 for dependents
Also included are changes to the Employee Retention Tax Credit, which will be extended until June 30, 2021: The credit rate will increase to 70% of qualified wages and the limit per employee will be raised from $10,000 per year to $10,000 per quarter. Plus, PPP borrowers may still qualify for the Employee Retention Tax Credit with respect to wages that aren’t paid for with forgiven PPP proceeds.
This bill also means good news for pet owners: the individual stimulus checks may also provide some relief for those who are struggling to pay pet care bills due to COVID-related financial difficulties.
Olah sees one particular upside to the new round of stimulus checks to individuals, many of whom are struggling to pay pet care bills due to COVID-related financial difficulties: It’s money “they can spend on treating their animals,” she told NEWStat.
Update: As of this writing, President Trump has refused to sign the bill into law, which will almost certainly postpone its implementation. Stay tuned to NEWStat for more details on this development.
Update to the first update: President Trump has now signed the Consolidated Appropriations Act of 2021, which includes the coronavirus relief measure and the 2021 appropriations bill, with no substantive changes to its provisions. Unfortunately, this will delay the onset of many of the Act's provisions.
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