IRS Notice 2020-32: Deductibility of Expenses when Loan is Forgiven Under Paycheck Protection Program (COVID-19)
The IRS has just provided guidance regarding the deductibility (or non-deductibility) of expenses paid from funds received from Paycheck Protection Program small business loans. As discussed in our prior blog, loan recipients can receive loan forgiveness in an amount equal to the sum of payments made for payroll costs, interest on mortgage obligations, rent obligations, and utility payments, but at least 75% of the forgiven amount must have been used for payroll. However, according to the IRS Notice 2020-32, no deduction is allowed for an expense that results in loan forgiveness. For further details, refer to IRS Notice 2020-32.
The professionals at Bormel, Grice and Huyett are always working to stay current as new information becomes available, and we are here to help you navigate these rule changes. Please call our office at 301-953-3259 if you have any questions regarding the Payroll Protection Program.Back To List