While, of course, a business owner should confer with his or her CPA regarding the provisions of PPP relative to the new relief package, I thought it important to highlight a provision which I consider to be a true “game changer.” Specifically, relative to the tax deductibility of PPP expenses, the Act overturns the previous IRS position and now permits business expenses paid with forgiven PPP loans to be tax-deductible for this year (2020).
The COVID-19 relief bill states that “no deduction shall be denied, no tax attribute shall be reduced, and no basis shall be denied, by reason of the exclusion from gross income” provided by Section 1106 of the CARES ACT. Fortunately, the provision is applicable to loans received under both the original PPP and any subsequent PPP loans.
For expert advice relative to any of the key provisions of the Act, I would recommend conferring with an experienced professional like Dave Natan (firstname.lastname@example.org), a partner with Newburg/CPA in Waltham, MA.
Wishing you a healthy and prosperous New Year,