01.11.2021 | Client Alerts

PPP Loans and Taxes

The CARES Act provided that PPP loan funds that are forgiven will not be included in gross income for tax purposes (contrary to the general tax rule that forgiveness of indebtedness is included in a taxpayer’s gross income). The $900 Billion COVID-19 Relief Bill that became law in late December clarified certain aspects of the PPP program under the CARES Act. To the great benefit (and relief) of recipients of PPP funds, PPP funds that are forgiven and used to pay employees, rent, utilities and other specified-business costs can now be expensed (reversing the IRS position on this matter); however, it is unclear whether the states will follow for state taxes.

ABOUT THE AUTHOR

Lydia G. Chesnick

Partner

Lydia is a recognized thought innovator in real estate and business law, advising on acquisitions, sales, financings, leasing, and the hospitality industry. She is dedicated to understanding her clients' legal and business needs, focusing on solutions that yield tangible results. Lydia's practice includes a diverse client base, from individuals to large companies, and she specializes in asset and wealth preservation and business succession planning. She is known for her commitment to quality and responsiveness.