IRS Guidance: No Tax Deductions Allowed for PPP-Paid Expenses

Overview

On April 30, the IRS released guidance providing that Paycheck Protection Program (PPP) loan borrowers may not deduct costs that are paid for with loan proceeds that are forgiven under the CARES Act. Additional guidance is provided on this and other provisions of the PPP, including loan forgiveness and mortgage interest obligations. While PPP loan borrowers should currently assume they cannot deduct any expenses relating to forgiven PPP loan amounts, Congress may still change this result and clarify its intent in subsequent COVID-19-related bills.

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