IRS Leaves Business Owners Who Took PPP in a Tax Quandary
Struggling business owners who took advantage of the government’s Payroll Protection Program (“PPP”) lifeline this year are now caught in the middle of an ugly fight between Congress and the IRS. At stake: Business owners’ ability to deduct several business expenses on this year’s tax returns.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed with overwhelming, bipartisan support to help defray the economic effects of COVID-19 and the government-mandated shutdowns. With a goal of providing fast, direct economic assistance to small businesses, the PPP was a key component of the CARES Act. The PPP provides small businesses with a loan equal to 2.5 times the business’s average monthly payroll costs (up, a colleague of mine.)
