New PPP Tax Implications—Talk to Your Accountant | News | APMA
New PPP Tax Implications—Talk to Your Accountant

August 24, 2020

Paycheck Protection Program on COVID mask,100 bill

Taxpayers who received loans through the Paycheck Protection Program (PPP) should be aware of the critical tax consequences relating to the forgiveness of these loans.

The PPP was created by Section 1106 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which provides that an eligible recipient of a covered loan could qualify for forgiveness of the indebtedness if certain criteria are met, and the forgiven loan is not included in taxable income. However, the IRS recently released Notice 2020-32 stating that expenses allocable to the forgiven PPP loan proceeds are not deductible. In other words, if a PPP recipient uses those PPP funds toward expenses that would otherwise be deductible, those expenses will no longer be deductible.

APMA recommends that PPP funds recipients carefully document how these funds are used, and that you work with your accountant to ensure you are in compliance.

Additional Information from Marcum LLP

Tax Considerations of PPP Loan Forgiveness

For further information, contact Dave Mustin at Marcum at 440-459-5755 or

To learn more about the PPP program, visit

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