IRS Clarifies Timing of Disallowed Deduction of PPP Loan Expenses
Good Morning, The IRS previously issued guidance indicating that expenses used to qualify for a PPP loan that is forgiven are not deductible. Recently, the IRS and the Treasury Department have issued guidance in Revenue Ruling 2020-27 regarding the tax treatment of these expenses if the taxpayer’s PPP loan hasn’t been forgiven by the end of the tax year. The guidance indicates that if the taxpayer reasonably expects to receive forgiveness of the loan on the basis of the expenses paid or accrued during the Covered Period, those expenses may not be deducted, even if the taxpayer’s loan has not been forgiven, ...