Gonzalez and Fletcher lead bipartisan letter calling for restoring the deductibility of forgiven PPP loans to help small businesses
Washington, December 7, 2020
Tags: Jobs and the Economy
WASHINGTON – U.S. Congressman Anthony Gonzalez (R – Rocky River) along with Rep. Lizzie Fletcher (D-TX), and over 50 bipartisan freshman colleagues sent a letter to Speaker Nancy Pelosi (D-CA) and Minority Leader Kevin McCarthy (R-CA) on Monday supporting restoring the tax deductibility of forgiven Paycheck Protection Program loans for small businesses.
“When we passed the Coronavirus Aid, Relief, and Economic Security Act in March, Congress created this program to help businesses within our districts and states survive this pandemic. By disallowing PPP loan recipients the ability to deduct forgiven PPP loan expenses, this is a surprise tax increase to businesses struggling to stay afloat. This is not what Congress intended.” reads the letter.
“It is pivotal that we do not increase the burden on small businesses that have already struggled financially during this pandemic,” said Congressman Gonzalez. “This bipartisan message shows America’s small businesses that we support them, and we will not saddle them with additional expenses during the time of their greatest need.”
“Keeping businesses operating and employees paid through the PPP is central to our efforts to mitigate the devastating impacts of the COVID-19 pandemic,” said Congresswoman Lizzie Fletcher. “Congress' intent when creating the PPP was to bolster our small businesses, not create new burdens by prohibiting them from deducting forgiven expenses. I am glad to work with my colleagues to make this much-needed legislative clarification and protect our small businesses from a surprise tax bill.”
“The Paycheck Protection Program has been a lifeline for nearly 150,000 small businesses across Ohio,” said National Federation of Independent Business Ohio Executive Director Roger Geiger. “Unfortunately, the IRS issued a guidance after the vast majority of small businesses received their loans, effectively resulting in a surprise tax hike at the worst possible time. We appreciate Rep. Gonzalez’s leadership in urging Congress to correct this regulatory decision and save Ohio small businesses from a tax increase when they are struggling to stay afloat.“
The letter, signed by more than 50 freshman members of Congress, encourages House Leadership to restore the tax deductibility of forgiven Paycheck Protection Program (PPP) loans. An issued guidance from the IRS disallowed the deductibility of forgiven PPP loan expenses, creating an undue burden on many of the nation’s small businesses. This guidance was issued after the majority of PPP loans were applied for and approved by the Small Business Administration and the Department of Treasury. If this guidance is not corrected, this decision will have a lasting negative impact on the economy as small businesses struggle to keep their doors open.
Read the full text of the letter here.