Monheit Frisch Group is right by your side to help you stay up to date. Please visit our COVID-19 Resources Page for Legislative and Regulatory updates.

Check us out on FINRA’s BrokerCheck

Guidance issued on deductibility of expenses with a PPP loan

On Nov. 18, the IRS and Treasury issued Revenue Ruling 2020-27 which provides long-awaited guidance on the tax treatment of expenses related to Paycheck Protection Program (PPP) loans. The guidance states that the expenses listed in section 1106(b) of the CARES Act that would otherwise be deductible will not be allowed in the taxable year that the expenses were paid or incurred and covered under a PPP loan that is forgiven or expected to be forgiven.

 

Businesses whose loans are not forgiven, or those who expected forgiveness and later did not receive it, will be able to deduct the expenses.

 

This ruling applies to all PPP borrowers regardless of if you’ve filed for forgiveness; therefore, the Treasury is recommending borrowers apply for forgiveness as soon as possible.

 

This ruling stands unless further legislation is passed (such as another stimulus bill) that reverses this ruling.

 

Reach out to us for assistance with your PPP loan forgiveness application and for assistance with tax planning in light of this ruling.

 

For more information from the Treasury, click here.

Click here to view the revenue ruling.

Click here to view the revenue procedure.

Leave a comment

We have two locations for your convenience:

 

Want to stay informed? Sign up for our newsletter:

 

Surprise Regional Chamber of Commerce LogoCPA PFS Logo

Avantax affiliated advisors may only conduct business with residents of the states for which they are properly registered. Please note that not all of the investments and services mentioned are available in every state.

Securities offered through Avantax Investment Services SM, Member FINRA, SIPC. *Investment advisory services offered through Avantax Advisory Services SM ** Insurance services offered through an Avantax affiliated insurance agency

The Avantax family of companies exclusively provide investment products and services through its representatives. Although Avantax Wealth Management SM does not provide tax or legal advice, or supervise tax, accounting or legal services, Avantax representatives may offer these services through their independent outside business. This information is not intended as specific tax or legal advice. Please consult our firm and your legal professional for specific information regarding your individual situation.

Content, links, and some material within this website may have been created by a third party for use by an Avantax affiliated representative. This content is for educational and informational purposes only and does not represent the views and opinions of Avantax Wealth Management SM or its subsidiaries. Avantax Wealth Management SM is not responsible for and does not control, adopt, or endorse any content contained on any third-party website.