How Will the CARES Act Benefit Your Dental Practice?
The CARES Act and how it affects you
March 27th became the official day when the largest stimulus package ever was officially signed into law. This package, valued north of two trillion dollars, is aimed at not only helping people but also businesses nationwide who have been affected and in some cases devastated by the Coronavirus.
The CARES Act (Coronavirus Aid, Relief, and Economic Security Act) is meant to help everyone, but there are specific sections that will especially help dental practices across the United States.
Visit the link to download a PDF version of the entire Act.
Economic Injury Disaster Loans
This loan, in particular, is great for dentists. It establishes an emergency grant which allows a dental practice that applies for an Economic Injury Disaster Loan to receive an advance on that loan of up to $10,000, which the Small Business Administration would have to distribute within three days.
This advance could then be used to pay for employees’ sick leave that is related to COVID-19, mortgage or rent on their practice/building, and other practice-related overhead expenses.
One thing to keep in mind, however, is that these grants will be awarded on a first-come, first-served basis until the allocated fund of $10 billion is used up.
Another major benefit is that applicants would not have to repay the money received in the grant even if they are denied the loan. To learn more about how to apply for this loan, visit the SBA site.
Retirement Account Withdrawals
The CARES Act bill also allows withdrawal of monies from retirement funds, like a 401K for example, of up to $100,000 this calendar year without it being subject to a tax penalty if either themselves, their spouse, or a dependent have been diagnosed with COVID-19, or if they experience adverse financial consequences as a result of a quarantine, being furloughed, laid off, or having their work hours reduced due to the virus.
Loan Repayment Deferrals
This portion of the Act focuses on existing loans of specific types (7(a) loans, 504 loans, and microloans) that qualify for assistance from the Small Business Administration. Under this CARES Act, the SBA would pay the principal as well as the interest and any fees currently owed on applicable loans. This would happen for a period of six months starting with the next payment due date.
Practice owners, as well as self-employed individuals, will be allowed to defer payment of their share of the Social Security Tax until the end of this calendar year (December 31st). The amount that was deferred would then be repaid over the following two years, with 50% being required by the end of the calendar year of 2021, and the other 50% by the end of 2022.
Help for Those With Student Loans
Any dentists new to the field or those still repaying student loans can benefit from this section of the bill, which enables borrowers to defer payments of loans through September 30th, with the added benefit that no interest would accumulate on any Federal loans held by the Department of Education (does not apply to privately held loans).
Certain practice owners may also be eligible to have a portion of their Federal Small Business loans forgiven (tax-free) for amounts used towards fulfilling payroll obligations, sick leave, and other approved overhead expenses between the dates of Feb 15th and June 6th.
COVID-19 Resources for Dentists
For even more resources, check out the following sites which have invested heavily in providing up-to-date resources that will benefit your practice in these times of need:
- ADA (American Dental Association)
- AADOM (American Association for Dental Office Managers)
- AAE (American Association of Endodontists)
- Roadside Dental Marketing