Tag Archives: PPP Loans

PPP Loans Are Supposed to Be Tax-Free. These 19 States Didn’t Get the Memo | Inc.com

Tax time is confusing and stressful under the best of circumstances. It could be even worse if you’ve taken out a loan from the government’s Paycheck Protection Program.

The tax status of the PPP has been muddled from the beginning. While these forgivable loans were never meant to be taxed as income, the Treasury Department and the Internal Revenue Service, under the Trump administration, held that business owners could not deduct expenses that were paid for with PPP. Congress disagreed, and in December 2020 put its position into law with the Consolidated Appropriations Act, which also contained a $900 billion relief package.

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