Qualified Expenses Not Deductible in 2020
Update for November 25, 2020
The IRS issued a ruling on November 18th that borrowers expecting Paycheck Protection Program loan forgiveness applications to be approved will not be able to take a deduction for qualified 2020 expenses in 2020 tax returns, even in situations where the forgiveness application has not been approved or filed by the end of the year. The ruling was issued in response to questions raised about non-deductible expenses in situations where the expenses are paid in 2020 and the forgiveness of the loan may not occur until 2021. Let us know if you have questions about how this may affect your business.
Further, many PPP loan recipients have started to apply for loan forgiveness. If you would like to apply for forgiveness and need help with producing the appropriate reports, please let us know in advance as you will need to have documentation prepared before starting the loan forgiveness application.
Lastly, we want to encourage everyone to apply for coronavirus relief programs that are being offered through the State of Maryland, such as the Covid-19 Layoff Aversion Fund. Check with your local jurisdiction, as well, as many counties are offering even more assistance.