With the passing of the CARES act, that included the Paycheck Protection Program, many businesses found much needed financial reprieve. Several tax changes came with this program, including the potential for non-taxable loan forgiveness when certain criteria are met. The goal of this loan program was to give businesses the liquidity necessary to retain their employees and pay immediate expenses necessary to keep their business afloat through the pandemic.
Guidance from the Treasury barred deductions of these expenses which was a hard setback to already struggling businesses. The newly introduced legislation will provide a solution to this problem and will enable small business to feel confident spending the funds to keep their businesses running without worrying about tax issues on the back end.
The AICPA has expressed its support of the Small Business Expense Protection Act and believes this legislature honors the original intent of the CARES Act and the PPP. The issues small business face are ever changing and legislation is trying to keep up. With regulations being updated on an almost daily basis, it is more important now than ever to keep on top of the shifting business landscape during this pandemic.
If you have questions about about this will affect your business, contact us today!