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Asked a question 10 months ago

So my accountant mails me this today, but i haven't seen anything about it. Any idea if this is true? Are the official forgiveness guidelines established yet, other than what you can spend it what they're expecting us to provide at loan maturation? "IRS released their ruling of how the PPP money will be treated for income tax purposes. Money received for PPP is non taxable income but the catch is that expenses paid and forgiven by the SBA, are non-deductible. So if the entire loan was forgiven, the expenses are non deductible and you will be liable for paying income tax on the loan"

Where am I?

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You do not have to pay tax on the loan amount that was forgiven - you simply compute your taxable income for 2020 WITHOUT deducting the expenses that were forgiven. So any payroll, rent, utilities or interest that you incurred and paid during the 8-week period that the Bank decided was converted into a Grant; do not deduct these as expenses. Some CPA's are simply Debited these expenses against the Loan Payable - PPP Account to avoid the confusion.