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Deductible Expenses & PPP Loans Forgiveness

2020 – 11/20 In a Revenue Ruling, the IRS clarified when a taxpayer that received a Paycheck Protection Program (PPP) loan may deduct otherwise deductible expenses if, at the end of the tax year, the taxpayer expects to receive forgiveness of the covered loan based on the otherwise deductible expenses. In a nutshell, the IRS ruled that a PPP loan recipient that paid expenses can’t deduct those expenses in the tax year they were paid if, when at the end of the tax year, the taxpayer expects to receive forgiveness of the covered loan. This is the case even if the taxpayer didn’t submit an application for forgiveness by the end of the tax year. Read Rev. Rul. 2020-27 here: https://bit.ly/3nItKk6

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