November 19, 2020 - PPP Loans
Last night the IRS issued Revenue Ruling 2020-27 regarding the Paycheck Protection Program (PPP). Please see the link below for a copy of that Revenue Ruling. According to this Revenue Ruling, all recipients of funds under the Paycheck Protection Program (PPP) are not allowed to deduct the expenses that are paid with the proceeds of the PPP loans on their 2020 tax returns. This Revenue Ruling basically says that even if you have not received forgiveness of your PPP loan in 2020, you are not allowed to deduct the expenses that you paid with your PPP on your 2020 tax return. Because you are not able to deduct these expenses, it will result in your tax liability going up. If you spent your PPP loan appropriately, it is assumed that the loan will be forgiven and therefore you are not allowed to deduct the expenses paid with the PPP loan.
If Congress does not pass any further legislation, you will not be allowed to deduct the expenses you paid with your PPP loan.
If you have any questions regarding your PPP loan or the forgiveness of your PPP loan, please reach out to the professionals at Downs & Associates CPAs, LLC.
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Downs and Associates CPAs, LLC
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Jasper, AL 35501