California Medical Association announces support of bill allowing physicians to deduct PPP expenses

The California Medical Association (CMA) recently announced its support of AB 80, a bill which will conform California’s state tax code with federal law related  to Paycheck Protection Program (PPP) loans for multiple sectors including health care.



This bill was introduced by Assemblymember Autumn Burke and would allow companies who received PPP loans to deduct up to $150,000 in expenses that were paid for by these loans. Businesses that took out loans of $150,000 or less will be able to maximize their deduction for state purposes. 

According to the Small Business Administration, just over 87% of physician practices who received PPP loans received a loan of $150,000 or less and would be eligible for this deduction. 

The CMA, in a previously released statement on the California COVID-19 Relief Package, said:

“While the California Medical Association supports the state’s swift action to provide financial relief to individuals, small businesses and physician practices impacted by the pandemic, more must be done to address the needs of practices who have been forced to cut or furlough staff or shut their doors during the worst of the COVID-19 pandemic. The fallout from the last year could have a lasting impact on our state’s health care infrastructure, and make it harder for many patients to receive the medical care they need when they need it.”  

According to the CMA, 87% of physician practices in California report ongoing fiscal concerns and have faced reductions to revenue and increases in costs. 

Dr. Peter Bretan, president of CMA, said in a statement, AB 80 is an important first step to recovery. 

“This is an important first step that will help a number of small and solo medical practices. But the state needs to do more to help physician practices that continue to struggle through this pandemic…If physician practices don’t receive the full extent of the support they need, we risk threatening patients’ access to care and the future viability of our health care delivery system. Aligning California tax code with federal tax code is a simple step that can be taken to provide support to physicians who need it, so that they can provide care to members of our communities when they need it most.”

The CMA says that without this bill thousands of small businesses who received a PPP loan would have been hit with a large tax liability. 

According to CMA, this aid is essential to all small businesses in California, not just the health care industry.

“Without this essential aid to physicians and providers, and other disproportionately affected industries, practice closures could reduce access to healthcare, crippling the state’s long-term recovery prospects. This bill maximizes the positive effect of the PPP loans, for those hardest hit, and ensures that struggling businesses and practices across the state can keep their doors open and continue to care for the members of our communities.”