About PPP loans and your taxes
If you applied and received a PPP loan in 2020, there are a few things to keep in mind regarding your taxes. The COVID Relief bill that was passed at the end of December included a declaration that expenses paid with PPP are deductible. It also established that PPP funds are not considered business income.
Here are a few things you should know about PPP and your taxes:
- Deductible expenses not only include payroll, mortgage interest, rent, and utility expenses but Congress has added software/cloud services, accounting, human resources, property damage due to civil unrest, PPE, and supplier costs incurred prior to loan approval.
- Debt forgiveness is not considered business income. However, you can’t use PPP funds to pay tax liabilities.
- Businesses can take FFCRA (Families First Coronavirus Response Act) tax credits if employees needed leave for COVID-19.
- If you haven’t heard from the IRS about your PPP Forgiveness at the time your taxes are due, you can file an amended return.
Taxes can be stressful during the most normal times. Having a bookkeeper on top of your company’s financial records can help you navigate complicated requirements in these most unprecedented times.
Contact Halsey Resources to learn more about our services.
RESOURCES: US CHAMBER – Will You Owe Taxes on Your Paycheck Protection Loan?
