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New tax guidance for Paycheck Protection Program (PPP) loan expenses

In September, we explained that if your PPP loan was forgiven that the corresponding eligible expenses are non-deductible for tax purposes. Since then, new guidance from the IRS was issued addressing the timing of the loan forgiveness and when the eligible expenses are nondeductible.


The new IRS guidance stated that if a business reasonably believes that their PPP loan will be forgiven in the future, expenses related to the loan are non-deductible, whether the business has filed for forgiveness or not. This means that the expenses used for PPP loan forgiveness will be non-deductible for the 2020 tax year. Therefore, we encourage all businesses to file for loan forgiveness or at least calculate the amount of the loan expected to be forgiven. This guidance will allow businesses to better evaluate potential tax liabilities. However, Congress continues to propose changes to the PPP loan program. Please stay tuned for further developments.


Our team at Quandt Berndt & Company, LLC (QBCo) believe it’s vital to fully understand all the ramifications tax treatment of PPP loan expenses. Whether it’s answering questions, running tax projections, and/or assisting with completing loan forgiveness applications, our team is here to help every step of the way. Please contact the following QBCo team members with any questions:


Dayne Behrens

Brian Snyder


QBCo is a premier full-service accounting firm located in the Milwaukee metro area that specializes in providing services to family-owned businesses and high net worth individuals. We are the accounting firm strategic partner of FBLP and would welcome the opportunity to work with each FBLP member. View our website for more information.

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