Important Information About Your PPP Loan

Last month, the IRS and the Treasury released a statement clarifying some confusion regarding the treatment of Paycheck Protection Program (PPP) Loans on your tax return. I know all of this can feel very confusing, so bear with me as I explain the details, but know that you can also reach out to our office at any time for more clarity on your specific case. 

The recent government announcement stated that business expenses paid for with PPP loans are not tax-deductible, and here’s why. Since businesses were not taxed on the proceeds of the loans, the expenses cannot also be tax-deductible. The U.S. Treasury statement reads, “this results in neither a tax benefit nor tax harm since the taxpayer has not paid anything out of pocket."

If you received a PPP loan, I hope you can attest to the fact that the money you received came when you needed it most. From my point of view, the PPP loan program may have saved small business America.

If you still have questions or concerns about this announcement, please don’t hesitate to give us a call. We would be happy to help you work through the details on your specific case and help with the loan forgiveness application so you can get back to the important work of managing your business.