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ARTICLE · 11 MAY 2020

IRS: Forgiven Paycheck Protection Program Loan Expenses Are Not Deductible

Frankfurt Kurnit Klein & Selz PC
Frankfurt Kurnit Klein & Selz PC
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Frankfurt Kurnit Klein & Selz PC

Frankfurt Kurnit Klein & Selz PC

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On April 30, 2020, the IRS announced in Notice 2020-32 that expenditures of CARES Act Paycheck Protection Program loan funds that otherwise would be deductible for federal income tax purposes will not be deductible ...

United StatesCoronavirus (COVID-19)

On April 30, 2020, the IRS announced in Notice 2020-32 that expenditures of CARES Act Paycheck Protection Program ("PPP") loan funds that otherwise would be deductible for federal income tax purposes will not be deductible to the extent such loan funds are forgiven pursuant to the PPP.

Under the CARES Act, a PPP borrower is eligible for forgiveness of its loans to the extent of the sum of the following payments during the 8-week "covered period" beginning on the date of receipt of its PPP loan: (1) payroll costs, (2) interest on any covered mortgage obligation, (3) any covered rent obligation, and (4) covered utility payments, although the amount forgiven is reduced if the average number of the borrower's full-time equivalent employees is reduced during the covered period relative to a specified base period or the salary or wages of certain employees is reduced by more than 25% relative to the last full quarter before the covered period. In addition, no more than 25%

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This post first appeared in Frankfurt Kurnit's Focus on the Data blog (www.focusonthedata.com). It provides general coverage of its subject area. We provide it with the understanding that Frankfurt Kurnit Klein & Selz is not engaged herein in rendering legal advice, and shall not be liable for any damages resulting from any error, inaccuracy, or omission. Our attorneys practice law only in jurisdictions in which they are properly authorized to do so. We do not seek to represent clients in other jurisdictions.

Originally published by the New York Legal Ethics Reporter

www.fkks.com

This alert provides general coverage of its subject area. We provide it with the understanding that Frankfurt Kurnit Klein & Selz is not engaged herein in rendering legal advice, and shall not be liable for any damages resulting from any error, inaccuracy, or omission. Our attorneys practice law only in jurisdictions in which they are properly authorized to do so. We do not seek to represent clients in other jurisdictions.

www.fkks.com

This alert provides general coverage of its subject area. We provide it with the understanding that Frankfurt Kurnit Klein & Selz is not engaged herein in rendering legal advice, and shall not be liable for any damages resulting from any error, inaccuracy, or omission. Our attorneys practice law only in jurisdictions in which they are properly authorized to do so. We do not seek to represent clients in other jurisdictions.

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