Ref: IRS Revenue Ruling 2020-27: HR 133 signed by Pres Trump 12/27/20

CONGRESSIONAL OVERRIDE of IRS: On December 21, 2020, Congress passed the newest stimulus bill. In that bill, Congress overturned the IRS interpretation of prior bills: Expenses paid for with PPP funds can be deducted… making PPP funds truly “tax free.” PRESIDENT TRUMP SIGNED THE BILL INTO LAW 12/27/20.

The IRS has made the ruling that if you REASONABLY EXPECT to qualify for forgiveness of the 2020 PPP loan, you must SHOW THE FORGIVENESS in 2020 ..EVEN IF YOU HAVEN’T BEEN NOTIFIED OF FORGIVENESS BY DEC 31, 2020 by your bank.

WHAT’S NEW: The PPP forgiveness will now be shown as non-tax income. In other words, it will be included on the books of the business, but not on the tax return. Additionally, expenses paid for with that money will be fully deductible on the tax return of the business.