Tell Congress: Stop the Surprise PPP Tax Liability
Did you know that restaurant operators who had Protection Program (PPP) loans forgiven may lose some key tax deductions, creating a surprise tax liability? And that the majority of restaurants might not be eligible for a new round of PPP funding? These two critical issues are why you need to take action now to protect restaurants from a surprise tax liability.
As Congress tries to move towards agreement on a final COVID relief package, plans have emerged for a new round of PPP funding that would require businesses to demonstrate a 50% loss of revenue. According to recently released data, 55% of restaurants that are losing money would not be eligible for this new funding! Congress must fix the legislation to ensure that more restaurants—the hardest hit businesses by the COVID-19 pandemic—are eligible.
When Congress created PPP, its intent was for business expenses paid by PPP to be tax deductible. However, guidance from the IRS says that expenses paid for with a forgiven loan are now taxable.
Negotiations are ongoing for this final relief package and time is of the essence. Take action now to help protect restaurants from surprise tax liabilities!