Update on PPP

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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