Posted on December 28, 2020
As part of the Consolidated Appropriations Act, which was signed into law yesterday, Congress specifically overruled the IRS interpretation of deductibility of expenses utilized with Paycheck Protection Program loan proceeds.
The IRS has previously taken the position that any expenses paid with Paycheck Protection loan proceeds were not deductible to the extent the loan would be forgiven. The Consolidated Appropriations Act overrides this IRS position, and as a result, confirms the deductibility of expenses paid with Paycheck Protection Program funds.
The Consolidated Appropriations Act contains other tax changes, including increasing the business meals deduction from 50% to 100%, extending the employee retention tax credit through June 30, 2021, extending the new markets tax credit through 2025, and more.
If you have questions about this update or any other PPP or COVID-related matters, please contact your Knox Law attorney or call us at (814) 459-2800.
For more information, please contact Sarah Holland.