The bill clarifies that Provider Relief Funds are not taxable as income, and expenses attributable to PRF are tax deductible. 

In a letter to Congress, the American Dental Association (ADA) expressed its support for new bills aimed at ensuring dentists and other health care workers won’t be taxed on provider relief funding (PRF) received during the COVID-19 pandemic. 

The August 20 letter thanked Senator Marsha Blackburn (R-Tenn) for introducing S 4525, the Eliminating the Provider Relief Fund Tax Penalties Act of 2020. 

“As you know, this bill clarifies that Provider Relief Funds are not taxable as income, and expenses attributable to PRF are tax deductible,” wrote ADA President  Chad P. Gehani, DDS, and ADA Executive Director Kathleen T. O’Loughlin. “This relief is critical to reducing tax burdens on health care providers that could limit their ability to continue practicing in the midst of the COVID-19 pandemic.”

In the letter, Gehani and O’Loughlin further point out that the costs associated with new infection control procedures, including the cost of enhanced personal protective equipment, are having a “considerable impact on businesses,” like dental practices. 

“This bill would ensure that dentists, regardless of taxpaying status, will not be subject to taxes on aid provided through PRF. By guaranteeing that relief funds do not add to a provider’s taxes, dental practices will be able to utilize the full value of the benefit. Consequently, a reduction in the small business dentist owner’s tax burden would help dental practices stay open, retain their employees, and provide their patients with care,” they wrote. 

The ADA also signed onto a letter with 28 other health care organizations thanking Sen Blackburn as well as Representatives Cindy Axne (R-Iowa) and Neal Dunn (R-Fla) for introducing legislation to assist providers during the pandemic. 

In that August 25 letter, the coalition wrote, “As health care professionals continue to face new challenges every day, [these bills] would deliver crucial relief and help ease the burden on our nation’s health care system. 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.” 

The deadline for dental professionals to apply for provider relief is September 13, 2020.