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Reminder: PPP spending deadline approaching December 31

Reminder: PPP spending deadline approaching December 31

By Katie Krakowka

If you received a Paycheck Protection Program loan, don’t forget that December 31 is the last day for businesses to spend forgivable PPP funds. Money spent after that date will no longer qualify for forgiveness.

Additionally, the IRS has issued guidance regarding deductions for expenses covered by PPP funds.

What does this mean?

In essence, businesses may not deduct for any expenses which qualify for forgiveness the borrower expects to receive, whether or not the business has turned in a forgiveness application.

Why does this matter?

The expense deduction could be more valuable to your bottom line than the cost of interest on your PPP funds. If that is the case, you may decide to forego forgiveness, and keep your PPP money as a loan. Depending on the timing of your fiscal year, this may be a decision that you need to consider in relatively short order.

If you’d like to discuss which option is best for you, or review the requirements for PPP forgiveness, our attorneys can help.