Expenses Paid with Payroll Protection Program Loan Proceeds to be Tax Deductible
Late Monday evening, Congress approved COVID-19 relief measures. The stimulus package includes legislation to fund the government for the next fiscal year, additional direct payments to individuals, extended unemployment benefits, and another round of Paycheck Protection Program (PPP) loans. President Trump must still sign the new legislation for any of its provisions to become law.
Of great relief to many small businesses is the provision that expenses paid for with PPP loans would be considered tax deductible, officially reversing an IRS decision made earlier in the year that would have seen some small businesses pay more in taxes. The ability to deduct expenses if paid for with PPP loans had been the focus of intense lobbying by small business groups.
Details are still emerging about the 5,593-page bill. The professionals at Gilliam Bell Moser will continue to monitor the legislation.