Significant Changes In The Paycheck Protection Program In Recent Legislation

Congress passed the Consolidated Appropriations Act (the "Act") yesterday, which includes a new round of COVID-19 stimulus. President Trump is expected to sign the Act into law this week. There are several major items included in the package that impact the Paycheck Protection Program (PPP). We have summarized the major provisions below:

Deductibility of Expenses Paid with PPP Loan Proceeds

In our previous Client Alerts, we have noted that the Treasury Department had taken the position that taxpayers may not deduct expenses if, at the end of the taxable year, the taxpayer reasonably expects to receive forgiveness of the PPP loan based on those expenses. We had noted that this interpretation did not seem to follow the intent of the original law.