Trade Associations Pressure Congress for PPP Deductibility
A group of more than 170 trade associations is urging the House and Senate to allow businesses to get tax deductions for expenses associated with loan forgiveness under the Paycheck Protection Program (PPP).
Under the PPP, enacted by the CARES Act, businesses can get loans that are forgivable if the proceeds are used for payroll, rent, mortgage interest and utilities. However, according to the Internal Revenue Service (IRS), outlined in Notice 2020-32, these ordinary business expenses paid with forgivable PPP loans will not be deductible based on the double benefit premise.
Trade associations are pushing back stating “Congress intended for the loan forgiveness under PPP to be tax-free. The IRS Notice reverses that position and eliminates the benefit, let alone a double benefit.”
Doeren Mayhew is hopeful the lawmakers and the IRS will do the right thing and make these expenses deductible. Stay tuned as more information is released related to the deductibility of PPP loan expenses. Should you have any questions on how this may impact your tax position, contact a Doeren Mayhew tax advisor.
This publication is distributed for informational purposes only, with the understanding that Doeren Mayhew is not rendering legal, accounting, or other professional opinions on specific facts for matters, and, accordingly, assumes no liability whatsoever in connection with its use. Should the reader have any questions regarding any of the news articles, it is recommended that a Doeren Mayhew representative be contacted.
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