The IRS released Notice 2020-32 on April 30, 2020. In the notice, the IRS provides guidance regarding the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Guidance and rules regarding the Paycheck Protection Program (“PPP”) loans continue to unfold. Prior to this notice, it was unclear whether a payment would be considered a “tax benefit” or not. The notice explains that loan recipients will be eligible for forgiveness of a covered PPP loan in the amount equal to the total of payroll, mortgage interest, rent and utilities incurred and paid during the defined eight-week period following the funding of said loan.
Furthermore, income associated with the forgiveness is excluded from gross income for purposes of the Code pursuant to the CARES Act. This guidance underscores the fact that “double dipping” will not be allowed under the IRS Code for an expense that is otherwise deductible.
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