Group calls on Congress to reaffirm its original intent of loan forgiveness under PPP
On Friday, Sept. 4, NPC joined 171 business organizations in calling on Congress to reaffirm its original intent of loan forgiveness under the Paycheck Protection Program (PPP) to be tax-free.
The groups write: “When the PPP was adopted as part of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, Congress made clear that any loan forgiveness under the program would be excluded from the borrower’s taxable income. Specifically, a recipient of a PPP loan was eligible for forgiveness of indebtedness for amounts equal to certain payroll, mortgage interest, rent, and utility payments made during a prescribed period, with any resulting cancelled indebtedness excluded from the borrower’s taxable income.”
However, since the passage of the CARES Act, the IRS effectively overturned Congressional intent by denying PPP borrowers the ability to deduct the same expenses that qualified them for the loan forgiveness. As part of the next round of COVID-19 relief, the group called on Congress to reaffirm its intent and restore the tax benefits it intended to give distressed businesses as part of the CARES Act.
The full letter can be found here.