IRS Doubles Down on Nondeductibility of PPP-Funded Expenses
The Internal Revenue Service has issued guidance for taxpayers who pay otherwise deductible expenses with Paycheck Protection Program loan funds, saying even if the payment and PPP loan forgiveness happen in different tax years, the expenses are not deductible. The IRS has also provided a safe harbor procedure for taxpayers whose application for PPP loan forgiveness is either withdrawn or denied.
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** This information is provided for general educational purposes only. Before taking any action based on this information, we strongly encourage you to consult with a professional accounting advisor about your specific situation.