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Update on PPP!

Updated: Oct 3, 2021

Expenses Paid for with PPP Loan Funds are Now Deductible

After many months of debate and consternation, Congress has finally

overridden the guidance issued by the IRS and Secretary Mnuchin

regarding deducibility of expenses paid for with PPP loan funds.

The Relief Act states “no deduction shall be denied, no tax

attribute shall be reduced, and no basis increase shall be denied,

by reason of the exclusion from gross income provided by” Section 7A

of the Small Business Act (formerly Section 1106 of the CARES Act).

In other words, subject to The Relief Act being signed into law by

the President or an override by Congress of a veto, the PPP expenses

that were paid with the proceeds of a forgiven loan will be tax

deductible for federal income tax purposes.

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