As small business owners are shifting their focus on the forgiveness phase of the PPP process, it is recommended to contact your accountant, the SBDC or read the latest guidance from the IRS.
- If you received both a PPP and an EIDL Advance, the amount of the Advance will be deducted from the PPP forgiveness. This means that you received any advance amount, you will end up with a loan of equal amount
- Any amounts of their PPP loan that are forgiven cannot be deducted from the borrower’s federal tax return. This means that payroll and related costs that have historically been deducted from gross revenues cannot do so, for the IRS states that doing so would create a “double tax benefit”. It is possible that future Congressional legislation may address this issue, but until/unless this occurs, clients should understand that their tax burden could increase as a result
When/if legislation addresses these situations, an update will be provided. However, until this occurs, you should be made aware of these realities.