IRS doubles down on nondeductibility of PPP-funded expenses

In guidance issued on Wednesday, November 18, IRS reiterated its position that taxpayers cannot claim a deduction for any otherwise deductible expense if the payment of the expense results in forgiveness of a Paycheck Protection Program (PPP) loan because the income associated with the forgiveness is excluded from gross income under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, P.L. 116-136. See this article for broader understanding regarding this decision and its implications.

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