Posts|December 22, 2020
New Stimulus Bill Clarifies PPP Tax Deductions and Provides a Second Round of Lending for Small Businesses
By Jase Hamilton
Surety Department Manager CPCU, AFSB
The Paycheck Protection Program (PPP) was the cornerstone of the CARES Act, loaning over $60 billion to applicants in the construction industry alone. Over the past few months, the IRS, Congress, and many of us have been looking for clarification on how loan forgiveness and related business expenses were going to be treated during the upcoming tax season.
With the passing of the new Bill, the wait is over. The new legislation provides clarity and benefits the PPP borrower by:
- Allowing businesses to still claim normal tax deductions for business expenses paid with PPP funds; and,
- Not having the forgiven portion of the loan be recognized as taxable income.
These clarification items come as a huge relief to many business owners, and will provide further fiscal benefits this tax season.
In addition to the clarification on tax treatment the new Bill also allows for a second draw of PPP funds for small businesses (less than 300 employees) that saw a decrease in their annual revenues by 25% or more.
With the new legislation, we highly recommend speaking with your CPA to discuss how these changes will impact your yearend tax planning.
For further information and a copy of the new legislation, please click here.
Posts|January 20, 2021
Does The Insurance Company Really Matter?
By Natalie Sherod
Risk Advisor CPCU, CIC
Seminars|January 20, 2021