1.7.21 Update: The stimulus bill passed in late 2020 made the expenses deductible, Yippee!
The IRS dropped the official guidance (again so we knew they were serious) we have been waiting for…the portion of a PPP loan that is forgiven is not deductible for tax purposes. This means you can not reduce your income by those expenses.
They also addressed the current year questions about what we do with those expenses if you haven’t received official forgiveness yet (but expect to) you cannot deduct the expenses paid with PPP loan proceeds. Hum….
Definitely have a discussion with your tax pro about how this is being recorded in your financials so you don’t get a massive surprise in April.
If you want to geek out with me, you can find the guidance here: https://www.irs.gov/pub/irs-drop/rr-20-27.pdf
