MHI, along with a diverse coalition of more than 150 national trade organizations, is urging Congress to clarify the tax treatment of loan forgiveness under the Small Business Administration’s Paycheck Protection Program (PPP) in the next round of COVID-19 relief legislation.
In April, the Internal Revenue Service (IRS) issued guidance stating that tax deductible expenses covered by PPP loan funds will not be eligible for deduction. The coalition is asking Congress to include language in the next COVID-19 relief package to overturn this IRS guidance, as it conflicts with Congress’ stated intent in establishing the PPP. In the letter, the coalition requests that Congress make clear that any loan forgiveness under the PPP should be excluded from a borrower’s taxable income. The coalition is calling on Congress to reaffirm this original intent in the next round of COVID-19 relief legislation.