AGD Joins Broad Coalition to Advocate for PPP Loan Forgiveness Deductibility
Over 180 organizations, including AGD, sent a letter to House Speaker Pelosi (D-CA) and Senate Majority Leader McConnell (R-KY) on August 4 that calls on them to ensure that expenses paid for with the Paycheck Protection Program (PPP) loans are eligible for tax-deductibility.
Under the CARES Act, lawmakers made it clear that any PPP loan forgiveness would be excluded from the borrower's taxable income. However, the IRS later issued a notice to overturn this policy by denying these borrowers the ability to deduct the same expenses that qualified them for loan forgiveness. The IRS' reasoning behind this action was that PPP loan recipients were receiving a "double" benefit.
The letter from the allied group of stakeholders poses several questions to the House and Senate leaders, illustrating the current uncertainty over the tax treatment of PPP loans. The letter also demonstrates that regardless of whether the IRS' reasoning is valid or not, Congressional intent is clear that PPP loan forgiveness should be deductible.
Impact on General Dentistry: PPP loans have been instrumental in providing dental practices with a line of support during the COVID-19 crisis. AGD strongly believes that the IRS should follow Congressional intent and ensure that loan forgiveness under the program is treated as tax-deductible.
Under the CARES Act, lawmakers made it clear that any PPP loan forgiveness would be excluded from the borrower's taxable income. However, the IRS later issued a notice to overturn this policy by denying these borrowers the ability to deduct the same expenses that qualified them for loan forgiveness. The IRS' reasoning behind this action was that PPP loan recipients were receiving a "double" benefit.
The letter from the allied group of stakeholders poses several questions to the House and Senate leaders, illustrating the current uncertainty over the tax treatment of PPP loans. The letter also demonstrates that regardless of whether the IRS' reasoning is valid or not, Congressional intent is clear that PPP loan forgiveness should be deductible.
Impact on General Dentistry: PPP loans have been instrumental in providing dental practices with a line of support during the COVID-19 crisis. AGD strongly believes that the IRS should follow Congressional intent and ensure that loan forgiveness under the program is treated as tax-deductible.