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Coalition urges Congress to make Provider Relief Funding Not Taxable

April 20, 2021

By Jennifer Garvin

Washington — The American Dental Association and more than 20 stakeholders are supporting legislation that would ensure Provider Relief Fund assistance is not taxable.

The coalition sent an April 19 letter to Reps. Cindy Axne, D-Iowa, Neal Dunn, R-Fla., and Brian Fitzpatrick, R-Penn., to thank the lawmakers for introducing HR 2079, the Eliminating the Provider Relief Fund Tax Penalties Act.

“As you know, health care professionals have faced significant challenges during the COVID-19 public health emergency, caring for patients under new, emergency circumstances,” the groups wrote. “Financial instability and uncertainty has become commonplace for many Americans, including our members and their employees.”

The organizations, led by the American Academy of Dermatology Association, noted that Congress’ allocation of $175 billion in financial relief to health care professionals through the Public Health and Social Services Emergency Fund, or Provider Relief Fund, has been “very necessary and greatly appreciated.” They said that many health care practices were asked to close during the beginning of the COVID-19 pandemic in order to preserve life-saving personal protective equipment. As a result, these businesses saw dramatic reductions in their revenue.

“Without this vital funding, immense financial pressures for health care professionals would have resulted in practice closures and a loss of access to care for our nation’s patients,” the coalition wrote.

While the groups said they were thankful the Provider Relief Fund helped offset lost income, they are concerned that the funds remain taxable, resulting in a 21% or more reduction to the benefit for taxpaying providers as compared to non-taxpaying providers.

“This negative impact penalizes those who care for our nation’s most vulnerable,” the coalition said. “The passage of HR 2079 would remove the negative tax implications for [Public Health and Social Services Emergency Fund] recipients by ensuring that all Provider Relief Fund assistance is not taxable, while maintaining that expenses tied to this assistance are tax- deductible. This programmatic change is essential to continuing to support our members and their employees during this unprecedented national health crisis.”

“As health care professionals continue to face new challenges every day, HR 2079 would deliver crucial relief and help ease the burden on our nation’s health care system,” the letter concluded. “Offering all health care professionals regardless of tax status the ability to fully utilize the [Public Health and Social Services Emergency Fund] assistance is a laudable goal and is one that we collectively support. We look forward to working together to continue to advance this critical bill.”

Follow all of the ADA’s advocacy efforts at ADA.org/advocacy.