IRS Prevents PPP Deductible Double Dipping
On April 30, 2020, the IRS issued Notice 2020-32 (the “Notice”), which answered a question asked by many business owners since receiving their Payroll Protection Program (“PPP”) loans: are deductible expenses paid for with the PPP loan still deductible once the PPP loan is forgiven? According to the IRS, the answer is “no”.
The Notice states that “no deduction is allowed under the Internal Revenue Code for an expense that is otherwise deductible if the payment of the expense results in forgiveness” of a PPP loan. The IRS also stated that income associated with the forgiveness is excluded from gross income.
We continue to monitor developing issues involving PPP loans and other government programs. If you have any questions about how this news effects your business, the lawyers at Beresford Booth remain available to assist you.