PPP LOANS MAY COST YOU YOUR BUSINESS – Part II
(Very Important Read For Business Owners)
They have finally come out with standards, confusing ones, for applying for loan forgiveness.
First, let me make a correction. Loan forgiveness, as of this writing, is not going to be taxed by the IRS. States have said they are going to follow suit; but me, being me, I would check.
As of this writing, the current plan is that any expense paid by PPP money is not going to be tax-deductible. This may change. But, if you don’t watch yourself, the non-deductibility of expenses paid by PPP money poses the same problem as loan forgiveness. You could end up with an unexpected tax bill.
Since things are in flux, it is possible that they may come up with a new wrinkle as it relates to what might be taxable as far as distributions and expenditures of PPP money. I encourage you to stay on top of this.
More change…. It is being said that the 8-week limitation on fund usage is going to be expanded to 16 weeks. This may or may not happen. They may choose to expand the period to 24 weeks, or something in between. You will be safe if you stick with and plan for the 8-week limitation.