Are Hhs Provider Relief Funds Taxable 2021

Here are some of the most common questions from providers: HHS has clarified that this reporting deadline will remain September 30, 2021; However, HHS grants suppliers a 60-day grace period – from October 1, 2021 to November 30, 2021 – during which HHS will not initiate collection or other enforcement actions against non-compliant suppliers. Despite this grace period for enforcement, HHS has urged suppliers to complete their submissions through the HHS reporting portal by September 30, 2021 to report on compliance with the terms of the Supplier Relief Fund. Can suppliers use the Supplier Relief Fund payment to pay taxes? (Added on 12/11/2020) Yes. HHS considers taxes levied on Relief Fund payments to providers as “health-related expenses attributable to the coronavirus” that are refundable with money from the Relief Fund to providers, A: Generally no. A health care provider described in paragraph 501(c) of the Code is generally exempt from federal income tax under paragraph 501(a). Nevertheless, a payment that a tax-exempt health care provider receives from the Provider Assistance Fund may be subject to tax under section 511 if the payment reimburses the provider for expenses or loss of income attributable to a business or independent business within the meaning of section 513. Can a health care provider who receives a payment from the Providers` Relief Fund exclude that gross income payment as an eligible disaster relief payment under section 139 of the Internal Revenue Code? (Added on 07/10/2020) “While we have made more than half a million assistance payments to health care providers during this pandemic, we know that many of them continue to face financial challenges related to COVID-19,” said Diana Espinosa, Acting Administrator of HRSA. “HRSA is committed to providing health care providers with as much support as possible through the Provider Relief Fund as they continue to respond to and recover from this crisis.” HHS also asks suppliers to contact the Supplier Helpline (operated by Optum) at 866.569.3522 to obtain the TTY 711 number. Hours of operation are from 9 a..m m. to 11 p.m.m (ET). For vendors looking for additional support, HHS will host a technical support webinar on July 8, 2021 at 3 p..m.M.

(ET). HHS also released a new report document, several deadlines (explained below) to know when recipients should use the funds received and when applicable reports are due to HHS, and additional guidance through Frequently Asked Questions (FAQs) for Recipients of the Relief Fund to Providers. To help vendors prepare their reports, HHS also published data entry worksheets, updated and added new portal user guides, published nine pages of Frequently Asked Questions (FAQs) on the reporting portal, and updated FAQs specific to the Vendor Relief Fund. Using these new instructions and guidelines, health care providers, in conjunction with previous updates, must be required by the September 30 deadline. September on Relief Fund payments to suppliers received between April 10 and June 30, 2020 (period 1). The provisions of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) have created a $100 billion fund to compensate eligible health care providers for health care expenses or loss of income due to the COVID-19 pandemic. An additional $75 billion has been allocated to the Provider Assistance Fund under the Paycheque Protection Program and the Health Care Improvement Act. In early April, HHS began making payments to the Provider Relief Fund to certain health care providers. Phase 4 payments of the FRP, in addition to the $8.5 billion American Rescue Plan (ARP) Rural payments to providers and providers serving rural Medicaid, pediatric health insurance (CHIP) and Medicare beneficiaries, are part of the $25.5 billion that the Biden-Harris administration is paying to health care providers to recruit and retain staff to purchase masks and other supplies. Modernize facilities or other activities needed in response to COVID-19. 2.

Health care providers must register for the reporting portal before submitting reports. Although the reporting portal wasn`t opened until July 1, HHS has been allowing healthcare providers to register an account on the site since January 2021. If a beneficiary of the Supplier Relief Fund has not yet registered for an account, they must do so before reporting it by clicking on on “Register”. This registration process links the recipient company and its tax identification number, as well as all subsidiaries to be included in the report and amounts received from the Supplier Assistance Fund program. Some recipients have had to work with HHS to register their accounts and link affiliates, so anyone who has not yet registered will be encouraged to do so as soon as possible. HHS has updated its Registration User Guide (originally published in January 2021) to guide users through the process. Late last week, the Department of Health and Human Services (“HHS”) updated its Frequently Asked Questions (“FAQs”) to provide guidance on the tax treatment of payments received under the Emergency Public Health and Social Services Fund (the “Provider Relief Fund”). The new FAQ makes it clear that a payment received from the Supplier Relief Fund is included in the gross revenue of for-profit suppliers.

However, payments from the Tax-Exempt Health Care Provider Relief Fund are not subject to tax unless the payment relates to a non-contiguous commercial or commercial activity. Until HHS provides additional guidance, healthcare providers who have not yet registered for reporting should do so on the reporting portal and also review the applicable terms and conditions of the Provider Relief Fund to ensure compliance with the program. In addition, healthcare providers can view McGuireWoods` previous guidelines on reporting to HHS (which, with the exception of the updates and changes mentioned above, may still apply in large part): The U.S. Department of Health and Human Services (HHS) reporting portal includes a new statement that appears to give providers an additional week in mid-December to submit reports and correct errors for supplier relief fund reports. Currently, published exclusively on the HHS Reporting Portal, there is a notice that the portal “will open for completion or reporting for Reporting Period 1 from December 13, 2021 to December 20, 2021 at 11:59 p.m. ET.” This extra week could be a critical relief for suppliers who did not submit the required reports on time earlier, although other HHS guidelines continue to reflect possible penalties for those who did not report. If suppliers agree to the terms of Phase 4 payments, this will be reflected in the public record. A: No. A payment to a business, even if the business is a sole proprietorship, will not be considered an eligible disaster relief payment under section 139.

Payment from the Provider`s Relief Fund is included in gross income in accordance with § 61 of the Code. 6. If the supplier`s eligible expenses correspond to the amount received from the provider`s relief fund, the supplier is not required to disclose in detail the lost income. HHS had previously pointed out that health care providers would be required to disclose both expenses and revenue losses in their reports. HHS appears to have removed this indication and instead requires a provider to report actual patient care revenues for 2019, 2020 and 2021 only if the amounts received in Period 1 have been fully used for eligible expenses under the Provider Relief Fund. (Expenditure is reported before the loss of revenue.) As a reminder, eligible expenses are those used to prevent, prepare for and respond to COVID-19, including services for COVID-19 patients and certain other health-related and administrative expenses, including taxes paid on amounts received from the Provider Assistance Fund that have not been reimbursed by another source. HHS determined that the supplier must maintain adequate documentation to support its calculations of expenses and revenue losses and that it bears the burden of proof that the expenses were reasonable under the terms of the Supplier Assistance Fund. The HHS guidelines state that “recipients are required to report at each payment receipt period in which they received one or more payments in excess of a total of $10,000.” To underline this policy, a recipient will submit a report if it received $10,000 or more during the applicable period, and not if it received such amounts in total during all periods […].