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Update: Common Questions on the Provider Relief Fund

by Ron Present
February 03, 2021

While the U.S. Department of Health & Human Services (HHS) has delayed the Provider Relief Fund (PRF) reporting deadline, they have continued to issue clarifying guidance on the requirements. On January 28, additional guidance was issued on reporting requirements for parent and subsidiary organizations.

Some of the most common questions from providers include:

Are Provider Relief Funds taxable?

HHS and IRS guidance on this has not changed. PRF funds are includable in gross income.

Are ALL providers subject to the Uniform Administrative Requirements?

Yes. All providers are subject to these requirements, even those who received less than $10,000.

Can we use our PRF funds to pay taxes?

Generally, yes, except for the Nursing Home Infection Control Distribution.

HHS provided the following guidance for these common questions:

May a health care provider that receives a payment from the Provider Relief Fund exclude this payment from gross income as a qualified disaster relief payment under section 139 of the Internal Revenue Code (Code)? (Added 7/10/2020)

No. A payment to a business, even if the business is a sole proprietorship, does not qualify as a qualified disaster relief payment under section 139. The payment from the Provider Relief Fund is includible in gross income under section 61 of the Code. For more information, visit the Internal Revenue Services’ website.

Which sections of 45 CFR 75 – UNIFORM ADMINISTRATIVE REQUIREMENT COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR HHS AWARDS are applicable to the General and Targeted Distributions of the Provider Relief Fund? (Added 12/28/2020)

Recipients (both non-federal entities and commercial organizations) of the General and Targeted Distributions of the PRF are subject to 45 CFR 75 Subpart A (Acronyms and Definitions) and B (General Provisions), subsections §§75.303 (Internal Controls), and 75.351-.353 (Subrecipient Monitoring and Management) and Subpart F (Audit Requirements). In addition, the terms and conditions of the PRF payments incorporate by reference the obligation of recipients to comply with the requirements to maintain appropriate financial systems at 75.302 (Financial management and standards for financial management systems) and the requirements for record retention and access at 75.361 through 75.365 (Record Retention and Access).

Can providers use Provider Relief Fund payment to pay taxes? (Added 12/11/2020) 

Yes. HHS considers taxes imposed on PRF payments to be “healthcare related expenses attributable to coronavirus” that are reimbursable with PRF money, except for Nursing Home Infection Control Distribution payments.

For questions or assistance, contact our health care industry experts.

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