IRS: No Double Tax Benefits From PPP Loans
Under the PPP, a small business loan program created as part of the third, $2.2 trillion coronavirus relief bill, small businesses wouldn't have to repay the low-interest loan they received as long as the loan went to essential expenses such as maintaining payroll.
Usually, wages are deductible expenses and forgiven debt counts as taxable income. But under the coronavirus relief law, the PPP loan forgiveness is not counted as taxable income. The IRS said in its guidance that expenses that result in forgiveness of a PPP loan are not tax deductible in order to prevent a “double tax benefit.”