ASA Central Network

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  • 1.  IRS & PPP Loans

    Posted 11-20-2020 13:14
    Hello All,

    I just received a phone call from our CPA telling me about the new ruling from the IRS that the PPP loans are taxable in this year 2020, before we have received our forgiveness. Apparently for this to be overruled, Congress must act prior to December 11. Do they realize we are all still hurting and the continuing rise in Covid cases is still disrupting our business? If we have to pay the taxes, it will destroy us. We are barely squeaking by now. I am going to email our Senators & Reps today. I hope everyone can notify your legislators to try and eliminate this ruling. Small businesses are having to endure way too much this year!

    ASA, can we have our lobbyists help with this as well?

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    Lisa McCallion
    President
    McCallion Staffing Specialists
    Montgomeryville PA
    (215) 855-8000
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  • 2.  RE: IRS & PPP Loans

    Posted 11-24-2020 17:04

    Amy, the IRS ruling does not make the amount of your loan taxable. The CARES Act expressly states that forgiven loan amounts are not taxable income.  But the IRS ruling provides that expenses paid or incurred that result in loan forgiveness cannot be deducted as a business expense. Bipartisan legislation has been introduced in Congress that would overturn the IRS position, but it's uncertain when Congress will act on it. ASA strongly supports tax deductibility of PPP-related expenses and is working in concert with other business groups to support tax deductibility of those expenses though executive or legislative action. Our advisors believe that any measure that is enacted to provide for deductibility of forgiveness related expenses will almost certainly apply retroactively.  

    Edward Lenz Esq.
    Senior Counsel
    American Staffing Association
    Alexandria VA
    (703) 253-2020



    ------------------------------
    Edward Lenz Esq.
    Senior Counsel
    American Staffing Association
    Alexandria VA
    (703) 253-2020
    ------------------------------

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  • 3.  RE: IRS & PPP Loans

    Posted 11-25-2020 14:54

    Thank you Ed.

     

     

    Lisa McCallion

    President

    McCallion Staffing

    601 A Bethlehem Pike

    Montgomeryville, PA 18936

    215-855-8000

    Fax 215-855-8820

    lmccallion@mccalliongroup.com

    www.mccallionstaffing.com

    McCallionStaffing_CMYK

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  • 4.  RE: IRS & PPP Loans

    Posted 11-26-2020 13:09
    Thanks for the input Edward, however, I need some additional clarity. Our application for forgiveness was based on the amount of payroll during the covered period. If the ruling states that the loan is not taxable income, but the expenses or payroll associated with forgiving the loan are not deductible, that creates a gray area. For simplicity, if payroll is $100, and the forgivable amount of the loan is $100, then the ruling states no income, no expense, for net tax of $0. However, if the payroll during that period "exceeded" the necessary amount for forgiveness, say payroll of $110 that covered the loan of $100 (ignoring the ratios for this example), will the additional $10 be deductible even though it was presented to the SBA for loan forgiveness? This will require a deeper dive based on the specifics of the ruling. I appreciate any guidance on this topic.

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    [Timothy] [Teague]
    [President]
    [Bluesky Medical Staffing Software]
    [Nasvhille] [TN]
    [5026414004]
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  • 5.  RE: IRS & PPP Loans

    Posted 11-30-2020 09:43
    Good morning all, please look for an article in this morning's edition of Staffing Today that provides the latest update on this topic.

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    Edward Lenz Esq.
    Senior Counsel
    American Staffing Association
    Alexandria VA
    (703) 253-2020
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