- October 26, 2020
- Posted by: admin
- Category: Uncategorized
For business owners who attained PPP Loans from the SBA following the CARES (Corona Virus Relief) Act of March 2020, there remains a lot of uncertainty surrounding loan forgiveness. There are two major gray areas surrounding loan forgiveness:
- Forgiven PPP loans are not considered taxable income, but IRS Notice 2020-32 declared that no expenses paid with forgiven PPP loan proceeds will be deductible. There is a possibility that Congress may yet act to make such expenses deductible as was their initial intent.
- There is also a possibility that Congress will act to provide blanket forgiveness of PPP loans up to $150,000. Blanket forgiveness would be much simpler for business owners as far less documentation would be required.
Dublin Advisors CPA recommends that business owners, especially those with PPP loans under $150,000, should wait to see if either or both of these issues will be cleared up by further Congressional action before year-end. Many lenders are making the same recommendation and have not yet distributed forgiveness applications to their borrowers. Note that there is no defined deadline for PPP borrowers to submit a forgiveness application, but borrower payments will be required 10 months after the end of the covered payroll period.
Clients of Dublin Advisors CPA may contact us anytime for assistance in evaluating your particular situations.