Will the forgiven PPP loan be taxable?
Posted by tim at June 5th, 2020
Some questions remain about whether or not the forgiven PPP loan will be treated as taxable income. Early guidance from the IRS suggests that businesses will be required to show the forgiven amount as a reduction of expenses (payroll, rent, interest, and utilities). However, there is broad agreement that this was not the intent of the PPP Program as written by the lawmakers.
If you are using QuickBooks and your PPP loan is forgiven, we recommend adjusting the loan balance to zero by crediting an Other Expense account named “PPP Loan Forgiveness”. This way the forgiven amount will appear on your Profit & Loss report. Your tax preparer will likely have more guidance and clarity on this by the time 2020 taxes are due.
Category: General News