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Paycheck Protection Program Update



On May 1, 2020 IRS released Notice 2020-32 providing guidance regarding the deductibility  of certain otherwise deductible expenses when the taxpayer receives a loan pursuant to the Paycheck Protection Program. The notice clarifies that no deduction is allowed under the Internal Revenue Code for an expense that is otherwise deductible if the payment of the expense results in forgiveness of the PPP loan.

A copy of the notice can be viewed here:

At this time it seems the notice contradicts the provision of the Section 1106 of the CARES Act that excludes the forgiveness amount from taxable income by, in essence, taking the otherwise allowable deductions away. We will monitor any changes in this area and will keep you informed.

If you have any question please do not hesitate to reach out to us via email, phone or contact us here!

Stay safe,

Mike, Katie & Marc


Topics: taxes, Accounting, BTR, COVID-19, CARES Act, Paycheck Protection Program, PPP, Economic Relief