If you obtain a loan under the Paycheck Protection Program to cover payroll, rent, utilities, and certain interest expense, you may have the loan forgiven. This forgiveness of debt isn’t taxable. But according to the IRS, you can’t deduct the expenses subject to the loan forgiveness. The reason: No deduction can be taken for expenses incurred for the purpose of earning tax-exempt income.
Alert: Follow coronavirus-related federal tax changes for your business through the IRS.
