Stimulus Bill Ppp Loan Deduction

While the original coronavirus aid relief and economic security act cares act made it clear that the forgiveness of a ppp loan would not be included in income the proposed language for the new legislation clearly indicates that expenses paid with a ppp loan will be deductible using the normal rules associated therewith.

Stimulus bill ppp loan deduction. Highlights of the new stimulus bill second round of ppp loans forgiveness rule changes. Small business association sba for first and second ppp forgivable small business loans and allocates 20 billion to provide economic injury disaster loan eidl grants to businesses in low income communities. The good news for most ppp borrowers is that the proposed bill allows for the deduction of these expenses and for loan forgiveness to not be included in income.

The irs said no to tax deductions with ppp money but congress reversed the irs. 21 that will provide 600 stimulus payments to individuals adds 300 to extended. In an important move for pandemic hit businesses that took or plan to take a paycheck protection program ppp loan the 900 billion stimulus bill set to pass this week allows companies to deduct business expenses paid for with ppp funds even if the funds are forgiven.

501 c 6 not for profit organizations eligible for loans for the first time and offers businesses facing severe revenue reductions the opportunity to apply for a second loan. For the vast majority of all ppp debtors the sole but quite considerable shift in the ppp principles are to give confirmation that they won t lose the income tax deduction which has been anticipated to be available for expenditures paid from ppp loans for things which are generally tax deductible. The bill provides more than 284 billion to the u s.

Included as part of the stimulus bill the bill are the covid related tax relief act of 2020 and the taxpayer certainty and disaster tax relief act of 2020. Stimulus bill resolves ppp loan deductibilty enhances employee retention credits provides other tax relief. The legislation the consolidated appropriations act 2021 also ensures tax deductibility for business expenses paid with forgiven paycheck protection program ppp loans provides fresh ppp funding makes sec.

For a discussion of other aspects of the bill see our comprehensive alert here.