The new guidance is in line with an IRS notice this spring that ruled out tax deductions for wages and rent paid with forgivable PPP loans in order to prevent a “double tax benefit.” The ruling, which means that contractors cannot write off these types of expenses if they were paid for with PPP loan funds, could mean that some firms will get hit with larger-than-usual tax bills.
According to the U.S. Chamber of Commerce, a forgiven PPP loan is tax-exempt but using the loan can reduce how much a construction firm can write off on its business taxes.
