The updated Payroll Protection Program was just signed into law and PPP Round 2 for Chiropractors should take note because the new COVID-19 relief package can positively impact your chiropractic practice!

{See UPDATE below} PPP Round 2 For Chiropractors has started!

The package was signed into law on December 27, 2020 and was bundled with a $1.4 trillion resolution to fund the government known as the Consolidated Appropriations Act of 2021.

Here are the basics of PPP that chiropractors need to know for now – and we’ll get you more details as they are made available:

PPP Round 2 for Chiropractors – The Basic Criteria

The new law provides an additional $284 billion to the Small Business Association (SBA) for Round 2 of forgivable PPP small business loans.

Here’s why you want to pay attention to PPP Round 2 for Chiropractors…

To ensure the PPP Round 2 funds go to the hardest hit small businesses, eligibility is limited to the following:

  • Employers with 300 or fewer employees AND
  • Businesses with a revenue loss of at least 25% in any quarter during 2020, compared to 2019.
  • Practices that have used or will use the full loan amount granted to them in their first round of PPP funding

Since it’s likely that 99.99% of all chiropractic practices have less than 300 employees, most chiropractors would be eligible based on these criteria. And practices whose revenues were down 25% in any quarter of 2020 (compared to 2019) also means that many chiropractors would qualify based on the second criteria as well.

PPP Round 2 for Chiropractors – The Benefits

In PPP Round 2 for chiropractors, practices may receive a PPP2 loan of up to 2.5 times their average monthly payroll costs in the year prior to the loan (2019).

Additional provisions have been included to support PPP borrowers with 10 or fewer employees, first time PPP borrowers recently eligible, and for loans made by community lenders.

Furthermore, in Round 2 the uses of the PPP funds have been expanded to include not only payroll but additional expenses related to the following:

  • Group health insurance
  • Life insurance
  • Disability insurance
  • Vision insurance
  • Dental insurance benefits
  • Rent
  • Utilities
  • Mortgage interest
  • Covered worker protection (including expenses to comply with COVID-19 federal health and safety guidelines),
  • Supply expenses essential to maintaining your current operations,
  • Operating costs such as software, cloud computing services, and accounting expenses.

PPP Round 2 for Chiropractors – Loan Forgiveness

For your chiropractic business to be eligible for full loan forgiveness under PPP Round 2, your practice must spend at least 60% of the funds on payroll costs over the covered period selected of either 8 or 24 weeks.

As with the original PPP program, there is a simplified loan application process for borrowers who take smaller PPP loans – however, that amount has been increased to PPP loans of $150,000 or less (Previously, the simplified forgiveness application was only available for PPP loans less than $50k)

PPP Round 2 for Chiropractors – Tax Deductibility

Even better, the Round 2 Payroll Protection Program law provides full (100%) deductibility for business expenses paid for with PPP2 loans.

In other words, under the new legislation, forgiven PPP2 loans will be completely tax-free!

Specifically, the updated CARES ACT language (in Section 1106) states that “no deduction shall be denied, no tax attribute shall be reduced, and no basis increase shall be denied, because of the exclusion from gross income provided.” (see link for the detailed passage)

PPP Round 2 for Chiropractors – The Dates & Deadlines {UPDATE}

At the time of this writing, one of the important details that remain is in respect to the timing. According to the recent law passed for PPP Round 2, the SBA must establish and release regulations on the new PPP funding no later than 10 days after the legislation was signed (which was Dec 27, 2020).

PPP Round 2 For Chiropractors has started!

The PPP2 program is now open for applications and will run through March 31, 2021 – click the link below to get to the application directly from the SBA website:

 PPP Second Draw Borrowers Application

Although the total amount of federal funding has increased with the hope and intent of not having PPP funds run out (like last time), there’s no guarantee — so it may be advisable for you to apply sooner than later if you are in need and meet the criteria!

IMPORTANT IDEAS TO KNOW ABOUT PPP ROUND 2 For Chiropractors

Note: only community financial institutions will be able to make First Draw PPP Loans on January 11th, and Second Draw PPP Loans on Wednesday, January 13th in order to promote access to the funds.  The PPP will open to all participating lenders shortly thereafter.

This round of the PPP continues to prioritize millions of Americans employed by small businesses by authorizing up to $284 billion toward job retention and certain other expenses through March 31, 2021, and by allowing certain existing PPP borrowers to apply for a Second Draw PPP Loan.

There are several important PPP Round 2 for Chiropractors updates,  including:

NEXT STEPS

If you are in need, contact your bank to start PPP Round 2 for Chiropractors — the easiest route is to go through the same bank that you utilized for the initial PPP loan (if you took one).

We will continue to update this post when more SBA guidelines or additional info is made available.

In the meantime, there are additional benefits inside the new COVID-19 relief package (Consolidated Appropriates Act of 2021) that also can positively impact your chiropractic practice – and we’ll address these in a future post.