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IRS Clarifies Deductibility of PPP-Related Expenses

Posted by Admin Posted on Nov 20 2020

NOTE: This post was updated on Jan. 11, 2021, to reflect the most recent developments.

The IRS originally issued Notice 2021-32 clarifying that expenses paid with the Paycheck Protection Program (PPP) Loan funds were not deductible. However, the Consolidated Appropriations Act 2021 (CCA 2021) provided that not only is forgives of the PPP Loan not taxable income, but also that the expenses paid with the loan proceeds are deductible. This reverses the position the IRS had taken in Notice 2020-32.

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