UPDATED 2:15 PM PT – Sunday, December 20, 2020
A new bipartisan proposal seeks to overturn the Treasury’s stance on the Paycheck Protection Program’s tax deductions.
Lawmakers are reportedly considering legislation that would allow business owners, who obtained these loans, to receive tax deductions on the costs covered by PPP funds.
According to Treasury Secretary Steve Mnuchin, there are still billions of dollars set aside for small businesses.
“In my opinion, there’s $140 billion sitting in the general fund ready to go out,” Mnuchin said. “There’s other money we haven’t used and I would hope we get something done quickly.”
However, under the current system, a business would not be able to claim any deductions for the amount paid to employees or for other costs that would normally be tax-deductible.
Therefore, businesses are unable to claim many deductions, but PPP funds have not been enough to keep them afloat.
“The PPP money was great at the beginning,” New York restaurant owner Wade Hagenbart said. “But then after you realized how long this is lasting, they would have had to provide 10 times as much as they provided.”
Mnuchin claimed that allowing deductions would be double-dipping into the tax pool, although many businesses are simply looking for a way to survive.
“And it was one of those things where, you know, the landlord deserves his rent and I’m not going to be paying rent for the time that we are closed,” Hagenburt added. “So we came to an agreement and he took the keys back and I walked away from a bar that I had open for 20 years.”
With tax day looming and rent to pay, many businesses are hoping for any relief from Capitol Hill.