So many business owners who have received a loan through the Paycheck Protection Program (PPP) want to put an end to the confusion concerning the PPP loan tax. If you’re one of them and need help with the right payment processing services for your company, don’t leave the page.
Answers to Questions Concerning PPP Loans Tax
The Paycheck Protection Program (PPP) has been serving as light at end of the tunnel for so many business owners during the crisis caused by COVID-19. PPP loans, backed by the SBA (Small Business Administration), give businesses cash flow help for 8 – 24 weeks.
With the tax season coming closer, you must be seeking answers to questions regarding the PPP loans. Before moving forward, remember that you can get fast and hassle-free access to additional working capital by turning to a reputable alternative online lender like First American Merchant.
FAM is a trustworthy alternative business funding provider that’s dedicated to offering the most advanced, safest, and cheapest business financing services to both large and small businesses in both low and high risk fields.
Now, let’s move on to the PPP loan tax issues:
- According to the CARES (Coronavirus Aid, Relief, and Economic Security) Act, the loan amount that’s been forgiven isn’t a taxable income. This refers to both the entire loan that’s been forgiven and just a portion.
- If your PPP loan is used for expenses, the latter will be deductible.
- If the PPP loan is used for paying business taxes, that amount can’t be forgiven.
- If you meet the requirements, you can claim the Employee Retention Tax Credit. No wages can be claimed if you’ve paid with a forgiven PPP loan.
Be aware that if you fail to meet the SBA’s requirements concerning loan forgiveness, you could be obliged to repay part of your loan. Besides, it’s not a good idea to accept multiple PPP loans. So, withdraw your applications with other lenders as soon as you’ve got your PPP loan approval.
So, currently, many business owners are trying to find answers to questions concerning PPP loan taxes. The above-mentioned points shed light on the main concerns that business owners currently have.Get Started Now