Member Alert: Action Needed on PPP Expenses Tax Deductions

Member Alert: Action Needed on PPP Expenses Tax Deductions

Contact Your U.S. Senator and Representative Urging Vote to Make PPP Expenses Tax Deductible


In the most troubling of economic times, your business may soon be hit with a surprise tax bill related to Paycheck Protection Program (PPP) loans 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 expenses associated with those loans for tax purposes. However, the IRS and Treasury have contradicted congressional intent and declared that borrowers who expect their PPP loan to be forgiven cannot deduct those expenses on their federal tax returns, which would be devastating.

Bills have been introduced in the United States Senate (S.3612 sponsored by Senator Cornyn (R-TX)) and in the House (H.R. 6821 sponsored by Representative Holding (R-NC) or H.R. 6754 sponsored by Representative Fletcher (D-TX)) ensuring that PPP loan recipients are provided the full benefits intended in the CARES Act. This legislation will ensure that the receipt and forgiveness of coronavirus assistance through the PPP does not result in an unexpected and burdensome tax cost for organizations that complied with the terms of the PPP. 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 times.

PNA urges you to contact your Congressional member asking for their support and encourages editorials on this topic. If you have any questions, please contact Holly Lubart. Thank you!


Additional Resource

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