PPP Borrowers Stand to Gain Tax Deductions

PPP Borrowers Stand to Gain Tax Deductions

WASHINGTON—Congress may be poised to deliver a tax benefit worth hundreds of billions of dollars to business owners who took Paycheck Protection Program loans.

The provision, part of the discussions over the year-end coronavirus relief bill, would ensure that PPP recipients can deduct the payroll costs and other expenses covered by forgiven loans, even though the loans themselves are tax-free income. The move would reverse a Treasury Department ruling that denied the deductions.

 

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