![]() ![]() The gross receipts of the business for any quarter during 2020 have no less than a 25% reduction from the same quarter in 2019.The business has no more than 300 full-time equivalent employees.The newly passed legislation allows for a second round of PPP loans – forgivable, just like the first round – for businesses meeting the following requirements:.While the income from PPP forgiveness is not included in income, for pass-through entities, such as partnerships and S corporations, there will be a basis increase for the non-taxable income, which eliminates the possibility that a loss created by the deductibility of the PPP expenses would be limited due to insufficient tax basis.The payroll and other “covered” expenses that were paid with your PPP loan proceeds will be tax deductible, thereby eliminating any taxability of the PPP loans and clarifying Congress’ intent that the PPP forgivable loans be tax free.If your PPP loan is forgiven, the amount forgiven is not to be included in your taxable income.Last night, Congress reversed that IRS decision, allowing expenses paid with PPP loan proceeds to be deductible in determining your taxable income. We have been patiently waiting for Congress to address the IRS ruling that payroll and other “covered expenses” paid with your Paycheck Protection Program (PPP) loan would not be deductible in determining your 2020 taxable income.Last night, December 21, 2020, Congress passed the “Coronavirus Response and Relief Supplemental Appropriations Act.” Embedded in this massive relief bill was the “COVID-Related Tax Relief Act of 2020,” which included the following: Georgia State & Local Tax (SALT) Alerts.Corporate Accounting | Accounting Support. ![]()
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