Pending congressional legislation (the Consolidated Appropriations Act, 2021) would make expenses paid with forgiven PPP loans tax deductible. Although it was always clear that forgiveness of a PPP loan would not be treated as taxable income, the IRS has taken the position that expenses paid with a forgiven PPP loan are not deductible. The effect of this IRS position is equivalent to making the forgiveness taxable. The pending legislation, if enacted, would cure this problem. Please contact Robert Snyder, Jr. if you have any questions.