When the Paycheck Protection Program (PPP) was established by the Coronavirus Aid, Relief, and Economic Security Act in March, the law stated that any loan forgiveness provided to qualifying employers under the program would be excluded from the borrower’s taxable income.
However, at the direction of the Treasury Department, the IRS issued Notice 2020-32 specifying expenses paid with PPP loans that are forgiven will not be tax-deductible.
How this would impact me?
Absent new legislation if I had a $100,000 PPP loan used for payroll expenses in 2020 that are not deductible (per the IRS Notice) could result in an increased tax bill to my company of $25,000 or more!
I ask you to support legislation to ensure employers are provided with tax deductibility of expenses paid for with forgiven PPP loans as intended by Congress.
Kara O. Webb
Johnson Creek Road, Covington