Firms Denied PPP Forgiveness Can Take Tax Credit
Post date
January 29, 2021
Body
By Robert Freedman, Construction Dive
Companies denied forgiveness of their Paycheck Protection Program loan can take a tax credit for the amount of proceeds they used to pay wages, the IRS said in a notice released last week.
The employee retention credit only applies to wages paid in the 2nd and 3rd quarters of last year and are eligible for the credit on the companies' 4th quarter return.
The policy reflects a change Congress passed as part of its stimulus bill in December. Prior to the change, companies couldn't take the credit if they also took a PPP loan. Now they can take the credit if they're a loan recipient, as long as the loan doesn't qualify for forgiveness.