PPP Loan and Business Deductions

The IRS has issued a ruling (Notice 2020-32) stating that normal business expenses paid with funds from a Paycheck Protection Program loan (PPP) are not deductible business expenses on a federal tax return.

Congress has issued a statement responding to IRS Notice 2020-32, reflecting that Congress intends expenses paid with Paycheck Protection Program (PPP) funds to be deductible for federal tax purposes. We will update as further guidance is issued.

IRS guidance may limit deductions for PPP expenses