On April 30, 2020, the IRS issued Notice 2020-32 confirming that no federal income tax deduction is allowed for an otherwise deductible expense if the payment has been forgiven under a PPP loan.
The CARES Act allocated funds to the PPP, allowing small businesses to secure loans for payroll, benefits, rent, utilities, and interest. Under certain conditions, the total amount of the loan may be forgiven, and the CARES Act provides that amounts forgiven shall be excluded from the borrower’s taxable income.
Price Kong’s tax advisors are available to provide tax planning assistance to taxpayers that have received PPP loans, and expect either partial or total forgiveness. Contact us at 602.776.6300 or visit pricekong.com for more information.