Released on November 4, 2020

Posted November 4 on the American Staffing Association website:

In a notice issued April 30, the U.S. Internal Revenue Service determined that expenses paid that result in forgiveness of a covered loan under the Paycheck Protection Program are not deductible under the federal tax code. Bipartisan legislation has been introduced in Congress that would overturn the IRS position, but it’s uncertain if or when Congress will act on it.

A petition is circulating urging the Trump administration to overrule the IRS position and allow the tax-deductibility of eligible PPP expenses. According to the petition, the IRS position should be overturned “because many businesses have used [PPP] funds to maintain or grow their businesses. If they are then required to come up with funds to cover a substantial tax liability, it could cause them undue financial distress.”

The petition is being circulated under a White House-sanctioned process called “We the People” that facilitates citizen advocacy on issues of concern. According to the “We the People” website, petitions that garner 100,000 signatures in 30 days will get an “official update” from the White House within 60 days.

ASA strongly supports the tax-deductibility of PPP-related expenses and encourages its members to consider signing the position. ASA will continue its efforts, in concert with other business groups, to support the tax-deductibility of those expenses through executive or legislative action.