Coronavirus Relief Bill Keeps Paycheck Protection Program Expenses Tax Deductible | Congressman Lee Zeldin

Coronavirus Relief Bill Keeps Paycheck Protection Program Expenses Tax Deductible

December 21, 2020
Press Release

WASHINGTON - Today, Congressman Lee Zeldin (R, NY-1) issued the following statement in support of language in Congress’ new coronavirus relief bill to ensure that recipients of the Paycheck Protection Program (PPP) can deduct expenses covered using PPP’s forgivable loans: 

"Our communities' small businesses have been hit hard in the last year. If state and local governments are going to shutter a business because of a pandemic through no fault of that business, then the government has the responsibility to ensure that business survives the government imposed restriction. The Paycheck Protection Program has helped provide relief to so many of these small businesses, which have either been shut down by the government or are otherwise struggling, and we must ensure that the small business owners who desperately need this funding to survive do not go under thanks to a surprise tax bill caused by the very relief that's supposed to keep them afloat." 

Congress enacted the Paycheck Protection Program in March 2020 to provide small businesses with loans that have a generous loan forgiveness provision, to help keep employees on payroll and allow recipient businesses to survive the pandemic. Since March, over 5 million loans have been made to businesses in all fifty states. 

On April 30, 2020, the Internal Revenue Service (IRS) released Notice 2020-32 disallowing the deduction of expenses forgiven under the PPP. 

Without this Congressional action, small businesses would be estimated to pay over $120 billion in taxes on forgivable PPP loans. 

On December 9, 2020, Congressman Zeldin and over 170 bipartisan Members of Congress urged Congressional leadership to fix this issue in upcoming coronavirus relief legislation.