1st Round of PPP Loan update as of 12/15/2020
If you received PPP funds and there is a reasonable expectation of loan forgiveness, you can not include the PPP amount in your gross income. The forgivable amount is not taxable. Also, the expenses paid with PPP funds can not be deducted on your income tax return as ordinary business expenses.
As of now IRS will consider that as double deduction if you received loan forgiveness using those expenses and also turned around and use the same expenses as deductible business expenses on your income tax.
Be aware of the current IRS issued guidance on PPP loan as you prepare your books for taxes.
Get your books in order so that you have no whoopsies and avoid penalties.
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