NECA and a coalition of organizations have signed a letter urging Congress to enact legislation before the end of the year that includes a technical correction addressing the tax treatment of loan forgiveness under the Paycheck Protection Program (PPP).

The CARES Act clearly stated that any portion of a PPP loan that qualified for loan forgiveness “shall be excluded from gross income” for tax purposes. In contradiction to Congressional intent, the IRS issues Notice 2020-32, which specified that “no deduction is allowed under the Internal Revenue Code…if the payment of the expense results in forgiveness of a covered loan pursuant to section 1106(b) of the [CARES Act].”

NECA encourages you to Take Action and tell your representative to act before the end of the year to ensure PPP loan forgiveness is not considered taxable income.