Posted by Robert Bryant, Esq., CPA on 12.28.20

By now everyone has most likely seen that President Trump finally signed the second covid relief bill (Consolidated Appropriations Act or “CAA”) and passed it into law. While this is obviously good news for millions of Americans during this pandemic, this new law has HUGE implications to corporate 2020 R & D tax credit study.  

As you know, one of the main sticking points with the Payroll Protection Plan funding (PPP) related to the possible non-deductibility of the PPP loan forgiveness.  However, now that the CAA bill has been passed into law, we can now safely say with 100% certainty that Congress indeed, did get it completely right, and are allowing all PPP funds used for payroll and other business purposes to be fully deductible on a taxpayer’s 2020 tax return.  

Taxpayers may now confidently consider PPP funds as:

non-income loan forgiveness amounts

as business deductions, 

and lastly and most importantly, 

count the PPP funds towards the 2020 R & D tax credit.

Further, the CAA relief bill also includes, among other important provisions, another battery of PPP funding that will continue to assist small business taxpayers struggling from the pandemic, into 2021.

Please feel free to reach out directly to Tax Point Advisors to answer any questions you may have about the CAA and how it may impact your organization, and we would be happy to discuss it further with you and your team.  We are very excited and thrilled with this new law and are looking forward to putting it to your best use for your 2020 and 2021 tax filings.