THE EVERETT ADVOCATE – THURSDAY, DECEMBER 31, 2020 Page 25 “YOUR FINANCIAL FOCUS” JOSEPH D. CATALDO DEDUCTIBILITY OF THE PAYCHECK PROTECTION PROGRAM EXPENDITURES T he Consolidated Appropriations Act, 2021 provides for the deductibility for the expenditures paid for with the Paycheck Protection Program (PPP) loan proceeds. This Act just passed both houses of Congress on December 21, 2020. President Donald J. Trump signed it into law on December 27, 2020. This reverses the Internal Revenue Service’s recent revenue rulings stating that the expenditures would not be deductible as the proceeds of the PPP loan represented tax-exempt income. This is truly having your cake and eat it too. Not only do businesses now not have to report the loan forgiveness as income, they now have the ability to deduct all of the expenditures. It’s a big win for businesses that have suff ered so much as a result of the Corona Virus. The COVID-Related Tax Relief Act of 2020 (COVIDTRA), Section 276(a) (1) codifi es the deductibility of the expenditures paid for with the PPP loan proceeds. COVIDTRA also provides that the tax basis and other attributes of the business’ assets will not be reduced as a result of the PPP loan forgiveness. COVIDTRA also provides for the direct payments to individual taxpayers called “recovery rebates”. As of this writing, Senate Majority Leader Mitch McConnell has blocked the increase from the $600 stimulus check to a $2,000 stimulus check. Section 307 of Title III, Continuing the PPP and Other Small Business Support in the Consolidated Appropriations Act states that if a PPP loan is not more than $150,000, it will be forgiven if the eligible recipient submits a certifi cation to the lender with the following information: 1. A description of the number of employees that were retained due to the PPP loan 2. The estimated amount of the PPP loan that was spent on payMassort Noise Complaint Line: 617-561-3333 Space for Lease 3 Large Rooms, each with Large Walk-in Storage Area. or Aerobics Studio. Located at Route 1 South at Walnut Street. Rollerworld Plaza, Route 1 South, 425 Broadway, Saugus. Call Michelle at: 781-233-9507 roll costs 3. The total loan amount No other documentation will need to be provided to the lender. The PPP forgiveness amount also does not have to be reduced by any Economic Injury Disaster Loan advance. ~ HELP WANTED ~ Construction Help Wanted Seeking Full-Time Laborers Basic construction knowledge, MA Drivers License with clean driving record a must. EVERETT ALUMINUM Call Steve at: (617) 389-3839
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