As commented upon previously and in a rare moment of bi-partisanship, members of Congress agree that a PPP loan obtained through the CARES Act and forgiven should also be deductible as an expense. Treasury Secretary Mnuchin (and the IRS) disagree, citing of all things, the tax code.
Failing to give guidance now is creating additional tax planning headaches. Denying the deduction, while correct from an accounting and tax perspective, ignores economic uncertainties facing businesses now. Allowing the deduction will give businesses a boost this year by conserving cash flow and next year when no one can reliably predict the status of the economy. The answer seems simple. I hope Congress thinks so as well.
Lawmakers from both parties say small businesses that get loans forgiven under the Paycheck Protection Program should be able to deduct associated expenses, such as wages, on their tax returns.
