Since the enactment of the CARES Act, the IRS took the position that no deduction is allowed for eligible expenses that would otherwise be deductible if the payment of the expense results in forgiveness of a Paycheck Protection Program (PPP) loan. It appears that the new stimulus package, currently awaiting passage by Congress will include provisions allowing businesses to deduct expenses associated with their forgiven PPP loans in addition to other tax breaks.
The text has yet to be released but we are monitoring developments closely and will provide an overview and further guidance after the law is released and passed by Congress.
The Coronavirus Task Force at Klehr Harrison stands ready to assist you in your business and legal needs. We will continue to provide additional information and guidance as the COVID-19 situation develops.