ACTION ALERT: Tell Congress to Prevent Surprise PPP Loan Tax
PIA National has issued an action alert urging Congress to prevent a surprise tax on Paycheck Protection Program (PPP) loan recipients.
Included in the Coronavirus Aid, Relief, and Economic Security (CARES) Act was a provision stating that any portion of a PPP loan that qualified for loan forgiveness “shall be excluded from gross income” for tax purposes. Despite Congress’s clear intent, the Internal Revenue Service (IRS) issued Notice 2020-32, which specified that “no deduction is allowed under the Internal Revenue Code…if the payment of the expense results in forgiveness of a covered loan pursuant to section 1106(b) of the [CARES Act].”
The ruling by the IRS undercut the clear intent of Congress in the CARES Act and transformed tax-free loan forgiveness into taxable income, raising the possibility of a surprise tax increase of up to 37 percent on small businesses when they file their taxes for 2020. PIA National was joined in a letter by over 500 groups in highlighting to Congress the importance of acting on this issue before the end of 2020.
Send a message to Congress now! Click on this PIA action alert.