IWLA Joins National Coalition Calling for PPP Loan Deductibility

IWLA, along with over 500 hundred national and regional trade associations, sent a letter on December 3 to Congress requesting that legislation be passed to prevent businesses from paying taxes on forgiven Paycheck Protection Program (PPP) loans. While PPP loan forgiveness was intended to be excluded from taxable income as passed by Congress in the CARES Act, the IRS subsequently published a notice (2020-32) saying borrowers could not deduct the same expenses that qualified them for the loan forgiveness.

The letter argues that the IRS's position amounts to "a surprise tax increase of up to 37 percent on small businesses when they file their taxes for 2020." Additionally, the letter points out that many PPP loan recipients have already used their loan funds. Without Congressional action, businesses will be facing an unexpected tax bill that they may not be able to afford amid another wave of mandatory business closures.

There has been bipartisan interest in Congress for passing a technical correction addressing the tax treatment of loan forgiveness under the PPP, including in the most recent bipartisan deal being considered for COVID-19 relief.

To become an IWLA member visit, http://31y.93c.myftpupload.com/become-an-iwla-member/