OSCPA has joined the AICPA in encouraging members to ask their representatives to pass legislation allowing small business owners to deduct expenses paid with Paycheck Protection Program forgiven loans.
Many small businesses will be hit with a surprise PPP-related tax bill unless Congress acts soon. In the Coronavirus Aid, Relief and Economic Security (CARES) Act, Congress clearly intended for recipients of forgiven PPP loans to be able to deduct otherwise-deductible expenses associated with those loans for tax purposes.
But the IRS has contradicted congressional intent. It has declared that borrowers who expect their PPP loan to be forgiven cannot deduct those expenses on their federal tax returns. The AICPA has already expressed its opposition and engaged with Congress and Treasury to work to ensure that PPP expenses are deductible.
Bills have been introduced in the Senate and in the House that would ensure that PPP loan recipients are provided the full benefits intended in the CARES Act. Tell your members of Congress to support small businesses by quickly passing S. 3612 and H.R. 6821, the Small Business Expense Protection Acts of 2020, or H.R.6754, the Protecting the Paycheck Protection Program Act.
Passing this legislation as soon as possible will allow small businesses more certainty as they focus on year-end business planning that is especially important in these challenging economic times.