Senator Cornyn

Cornyn, Braun Praise Inclusion of PPP Loan Deduction for Small Businesses in Year-End COVID Relief Bill

December 21, 2020

WASHINGTON – U.S. Senators John Cornyn (R-TX) and Mike Braun (R-IN) praised the inclusion of the Small Business Expense Protection Act, which would clarify the Small Business Administration’s Paycheck Protection Program (PPP) so small businesses can deduct expenses paid with a forgiven PPP loan from their taxes, in the omnibus funding legislation:

“The Paycheck Protection Program has been a lifeline to small businesses in Texas struggling to stay afloat during the pandemic,” said Sen. Cornyn. “By clarifying that expenses paid with a forgiven PPP loan can still be deducted from small businesses’ taxes, we can help ensure small businesses won’t be hit with yet another hardship during an already difficult year.”

“As a Main Street Entrepreneur focused on solutions, I’ve introduced legislation in May to safeguard small businesses.  The CARES Act was intended as a lifeline to small businesses, but forcing them to shoulder tax liability for these forgivable loans would be like throwing them a cinder block. I’m glad Senator Cornyn and I have been able to get this much needed fix past the finish line for the American People,”
 said Sen. Braun.

Background:

The intent of the Paycheck Protection Program, which was created in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, was to maximize small businesses’ ability to maintain liquidity, retain their employees, and recover from the pandemic as soon as possible. However, the IRS issued a notice that said small businesses cannot deduct these business expenses. This notice is contrary to congressional intent, which this legislation would clarify.