Congresswoman Lizzie Fletcher Announces Legislation to Ensure Small Business with PPP Loans Remain Eligible to Receive Tax Deductions
(Houston, TX) – Today, Congresswoman Lizzie Fletcher (TX-07) announced that she will be introducing legislation to ensure that small business owners with forgiven Paycheck Protection Program (PPP) loans are also eligible to receive tax deductions for wages and other expenses paid during the period of the loan. This bill comes after the Internal Revenue Service (IRS) issued guidance last week that would prevent business owners who have their PPP loans forgiven from claiming tax deductions on otherwise deductible expenses if they were paid through government aid. Congresswoman Fletcher’s legislation would supersede this guidance, providing small businesses with additional relief as they face the economic impacts of COVID-19.
“Keeping these businesses operating and employees paid through PPP is central to our efforts to mitigate the devastating impacts of the COVID-19 pandemic. The IRS guidance issued last week goes against Congressional intent of the CARES Act and will create an additional cost for small businesses that are already struggling through these hard times,” said Congresswoman Lizzie Fletcher. “I am proud to announce legislation that would clarify this intent and provide small business owners with additional relief during this time, and I hope to see it included in the next COVID-19 legislation.”
The Coronavirus Aid, Relief, and Economic Security (CARES) Act created the Paycheck Protection Program (PPP) to provide forgivable loans to small businesses, nonprofits, and self-employed workers to maintain existing workforce and help pay for other expenses like rent, mortgage, and utilities. As of May 1, 2020, a total of $175 billion has already been disbursed through this program.