In a Q&A with the Treasury on May 3, 2020, it was determined that a governmental hospital exempted under §115 may be eligible for the PPP loan as long as it meets the description set forth in §501(c)(3) and meets the other criteria for eligibility. This automatically includes dual-status hospitals. Many governmental hospitals meet the description of a 501(c)(3) hospital but do not have an exemption under 501(c)(3) because it is not necessary as they are exempted under §115.
Under this FAQ, these hospitals are not required to have a determination letter from the IRS stating that they are a 501(c)(3) for them to qualify for the loan, but in order to protect themselves, they will need to provide some sort of documentation that they meet the description of a 501(c)(3) hospital. Some examples might include:
- Articles of incorporation
- Former determination letter and request for voluntary termination of 501(c)(3) status
- A memo from an attorney
While this information is not required to be attached to the loan application, it would be prudent for the hospital to maintain this information on record in case of a regulatory audit.
If you have any questions about how this will affect you, please contact your Warren Averett advisor or complete this form to have a member of our team reach out to you.
This article reflects our views at the time this article was written and should be used as reference only. We recommend that you talk to your Warren Averett advisor, or another business advisor, for the most current information or for guidance specific to your organization.