Jessica L. Jeane, J.D., Director of Public Policy & Strategic Communications
December 21, 2020
The bipartisan push on Capitol Hill for Paycheck Protection Program (PPP) deductibility has succeeded.
Lawmakers confirmed late in the day on December 20 that a provision clarifying the congressional intent for the PPP that ordinary and necessary business expenses are deductible, even if paid with from a forgiven or forgivable PPP loan, will be included in a COVID-relief package expected to clear Congress today.
Additionally, Treasury Secretary Steven Mnuchin has confirmed that PPP deductibility will be included in the soon-to-be released economic relief measure, which stands in contrast with Mnuchin’s consistently stated view that allowing the deductions would be “double dipping." The legislation would largely override Treasury and the IRS’s guidance on the issue.
“Businesses that received PPP loans would be able to take tax deductions for the expenses covered by forgiven loans, overcoming objections from Treasury Secretary Steven Mnuchin,” Sen. John Cornyn, R-Tex., said in a December 21 tweet. Similar language to Cornyn’s bipartisan Small Business Expense Protection Act, (S. 3612) is expected to be included in the forthcoming economic and small business relief package.
Authorization for a second round of PPP loans for qualifying small businesses will also be included under the new bill, as well as other PPP forgiveness and tax provisions. As of this morning, legislative text of the approximately $900 billion measure, which will be attached to a fiscal year 2021 appropriations package, has not yet been released.
The National Society of Accountants continues to monitor these developments and will provide members with the legislation once released. Procedurally, it is expected to be a long day on Capitol Hill. Votes are expected midday in the House and later this evening in the Senate. President Donald Trump has signaled he will sign the measure once it reaches his desk.
In the meantime, House Small Business Committee Republicans have released a general summary of the relief package’s small business provisions. The two-page summary can be located here.
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NSA presents this information in the interest of its members for information purposes only and is not intended to provide, nor should it be relied upon, as legal, tax, or accounting advice.