IRS Releases Safe Harbor for PPP Loan Recipients to Claim Deductions, Apr. 30, 2021

The IRS released a safe harbor that allows PPP loan recipients to claim federal tax deductions for business expenses even if those expenses were paid with PPP loan proceeds that were later forgiven. The safe harbor applies to taxpayers who did not deduct otherwise deductible expenses paid or incurred during the tax year ending after March 26, 2020, and on or before December 31, 2020 (the 2020 tax year) that resulted in, or were expected to result in, loan forgiveness. For more information on the impact of PPP loan forgiveness, see Q .