PPP loans may be forgivable, tax exempt
The Paycheck Protection Program loan, which gave small businesses help to pay salaries and expenses during the coronavirus crisis, will be forgiven so long as companies retained employees and used the funds for covered expenses.
The PPP money must have been used at least 60 percent for payroll, or no more than 40 percent for covered expenses such as mortgage, rent, and utility payments. PPP can be forgiven if employers continue to pay salaries as normal during the eight weeks after the loan is taken out.
Employers will have to do a loan forgiveness application. You can find that at: https://www.sba.gov/document/sba-form-paycheck-protection-program-ez-loan-forgiveness-application
If the PPP loan is forgiven, it is exempt from tax. But, employers might find that their deductible expenses are lower. So, if you used PPP to pay $1,000 in utilities during the 8-week PPP period, you can't also deduct the $1,000 amount as a utility expense on your taxes.