IRS National Taxpayer Advocate: PPP Loan Tax Issues Outlined (IRC §162)

April 29, 2021, 5:00 AM

Federal taxation aspects of Paycheck Protection Program (PPP) loans include the treatment of loan forgiveness, the deductibility of expenses, interplay with the Employee Retention Credit (ERC), and creditors’ rights, the IRS’s National Taxpayer Advocate’s blog addressed April 29. The CARES Act states that forgiven loans, in general, are not includible in income and the IRS issued Announcement 2020-12 informing lenders not to file Forms 1099-C upon forgiving a loan, the NTA noted. Originally, expenses paid with forgiven PPP loans were not deductible but the Consolidated Appropriations Act, 2021, and subsequent IRS guidance clarified the deductibility of such expenses. Amounts allowed...

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