Federal Tax, SBA

PPP Loan Forgiveness Guidance

The IRS announced that lenders who make Paycheck Protection Program (PPP) loans that are later forgiven under the CARES Act shouldn’t file information returns or furnish statements to report the forgiveness. Generally, the tax code requires lenders that discharge at least $600 of a borrower’s debt to file a Form 1099-C, “Cancellation of Debt,” with the IRS and furnish a statement to the borrower. But the IRS stated that this isn’t required when all or a portion of the stated principal amount of a PPP loan is forgiven because the eligible recipient satisfies the forgiveness requirements. A PPP loan recipient is eligible for debt forgiveness if certain conditions are satisfied. (Ann. 2020-12). Contact Cg for more information. © 2020