May 8, 2021: Written by Kent L. Schwarz, Esq.
As you are probably aware, the Payroll Protection Program (“PPP” ) implemented as part of the Cares Act allows PPP loans to be forgiven to the extent the proceeds are used for certain designated expenses, such as payroll costs, rent, utilities and mortgage interest. Section 1106(i) of the Cares Act provides that any amount of the loan that is forgiven under the Act, shall be excluded from gross income for federal income tax purposes. The Cares Act is silent on whether the expenses giving rise to the loan forgiveness are deductible.