April 23rd, 2021

The Paycheck Protection Program (PPP) offered a lot of assistance to businesses struggling during the COVID pandemic. Originally, businesses that received PPP loans were only able to cover payroll costs, interest on covered mortgage obligations, covered rent obligation payments, and covered utility payments, but could not deduct other corresponding expenses.

What’s New?

Business Owners, if you received the first-round of Paycheck Protection Program loans, certain expenses that were not eligible to be deducted then are eligible now?!
With the Dec. 27, 2020 enactment of the Consolidated Appropriations Act, businesses now may claim these deductions on the first PPP loans that didn’t include the new eligible expenses. These businesses can use the safe harbor provided to deduct those expenses on the return for the immediately subsequent year.
Read through the IRS guidance for more information. Also, contact your PPP lender and find out what documentation you need for PPP loan forgiveness applications.
Need to get your taxes done? Contact us today to schedule with an accountant!