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Coalition urges Congress to make provider relief funding tax deductible

July 17, 2020

By Jennifer Garvin

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Washington — The ADA and other health care stakeholders are urging lawmakers to clarify a provision in the Coronavirus Aid, Relief, and Economic Security Act so that providers will not be required to pay taxes on money they receive from the provider relief fund.

In a June 25 letter to leaders of the U.S. House and Senate as well as members of the House Committee on Ways & Means and Senate Committee on Finance, the groups asked for “Congressional action to clarify and correct” what the groups believe are the unintentional tax consequences of policies meant to provide vital funding to health care providers through the Public Health and Social Services Emergency Fund (also known as the Provider Relief Fund) and other programs.

They noted that lawmakers raised a similar concern with the Paycheck Protection Program and introduced legislation that is currently under consideration.

The groups are urging Congress for clarification to ensure the following for tax-paying health care providers:

• The Public Health and Social Services Emergency Fund and similar funding provided in response to COVID-19 is not taxable.
• Entities receiving these funds maintain tax deductions attributable to these funds.

“It is essential that these provisions are enacted together to avoid the situation that occurred with the Paycheck Protection Program,” the groups wrote. “Without such a correction, tax-paying health care providers lose at least 21% of the benefit of these funds and are treated unequally as compared to non-tax-paying providers. We do not believe Congress intended such a consequence in enacting the CARES Act and other COVID-19-related legislation.”

The deadline for dentists to apply for provider relief is Aug. 3. To learn more and apply, visit cares.linkhealth.com.

For more information about the ADA’s advocacy efforts during COVID-19, visit ADA.org/COVID19Advocacy.