Richard J. Wright, Jr. CPA
Director | Tax Practice
Although the PPPFA was just signed by the President last Friday, there have been a few important developments the last few days to bring to your attention:
- The Treasury and SBA now says that additional guidance and a modified forgiveness application will be forthcoming “promptly.” Additionally, Treasury Secretary Mnuchin has stated that although the newly adopted 60% payroll threshold necessity for forgiveness, as written creates a “cliff” and would potentially not provide for partial forgiveness if payroll spending is less than 60%; the intent is that businesses will be provided with partial forgiveness. As recently as yesterday, Secretary Mnuchin has signaled to Congress that both Treasury and the President are open to additional PPP modifications.
- In light of the above commentary, Congress is working on a PPP technical corrections bill which is expected to, at a minimum, address and fix the “cliff” issue mentioned above, as well inclusion of PPE type expenses (masks, protective gear, etc.) that employers have incurred under the eligible expenses currently allowed to be used with PPP funds.
- In our opinion, the biggest news with respect to PPP that we’ve recently learned is that there is bipartisan legislation being worked on in the Senate that would clarify that the receipt and forgiveness of a PPP loan will not affect the tax treatment of ordinary business expenses, otherwise, allowing those items to be deductible.
Thus far, our most accurate commentary is that every piece of PPP legislation, interim rules and/or guidance, continues to develop and for every one of these instances, additional questions are then generated, most of the time without definite answers.
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