COVID 19

IRS Clarifies Deductibility and Timing for PPP Related Expenses

On Wednesday, November 18, 2020 the IRS released guidance regarding the deductibility and timing of covered expenses that resulted from the use of funds provided through the Paycheck Protection Program.  The guidance, in part, reads “If a business reasonably believes that a PPP loan will be forgiven in the future, expenses related to the loan are not deductible, whether the business has filed for forgiveness or not.”   The guidance includes links to a related revenue ruling and revenue procedure.  In the revenue ruling, the Service states “A taxpayer that received a covered loan guaranteed under the PPP and paid or incurred certain otherwise deductible expenses…