The Coronavirus Aid, Relief, and Economic Security (CARES) Act, enacted March 27, established the Paycheck Protection Program (PPP), which allowed employers to acquire a loan to cover payroll costs and certain non-payroll costs to help their businesses endure reduced economic activity resulting from COVID-19. The Paycheck Protection Program Flexibility Act (PPPFA), enacted June 5, modified aspects of how the program works. The Paycheck Protection Program (PPP) stopped accepting applications on August 8, 2020.
Last week, a bipartisan Congressional group released details of new relief bills totaling about $908 billion–The Emergency Coronavirus Relief Act and the Bipartisan State and Local Support and Small Business Protection Act. The latter bill addresses both state and local aid and liability protection for businesses operating during the pandemic, which have been controversial and subject to ongoing congressional negotiations, while the former contains provisions which have broader support.
The Bipartisan Emergency Coronavirus Relief Act includes support for renewed PPP and would alter the tax treatment of forgiven PPP loans by allowing business expenses paid for by PPP loan funds to be deductible. As we mentioned in our PPP webinar last week, the deductibility of such funds was limited to the extent to which they were used for payroll and related costs.
For additional information, please refer to this release from the Tax Foundation.
As you are closing out the year and have questions related to PPP or other matters, contact Tene Thomas or Thomas Jones. If the new PPP funding becomes available in the new year and you qualify for an additional loan, let us help guide you through the process.
Thomas Jones Jr., CPA
Partner
Tax and Small Business Solutions
Tene Thomas, CPA
Partner
Tax and Small Business Solutions