Category: Year End Compliance
The forgiveness of your PPP loan will not create taxable income for federal purposes. The expenses paid with PPP funds and used to get forgiveness are deductible for federal purposes even if the PPP loan is forgiven. The forgiven debt is considered tax exempt income and adds to your basis in the year of forgiveness. This may be important to your ability to take losses or distributions without adverse tax consequences so we highly recommend you get these loans forgiven as soon as possible. The forgiveness may impact your ability to maximize your employee retention credits. If you are eligible for these ERC credits, contact our office before submitting your PPP application.
We apologize for any inconvenience this may cause.
If you have any questions, please contact your Kerkering Barberio representative.