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#PPP #Rant
Business took a PPP. Used it all to pay wages for employees that weren't working/minimal work, back when it was "2 weeks to flatten the curve" & were forced to shut down temporarily......law when borrowed says PPP is non-taxable.
Business took a PPP. Used it all to pay wages for employees that weren't working/minimal work, back when it was "2 weeks to flatten the curve" & were forced to shut down temporarily......law when borrowed says PPP is non-taxable.
Great. Super. IRS rains on that parade and says expenses not deductible. Biz says I'll suck it up, and when it's forgiven pay the tax. 8 months into 2 weeks to flatten the curve, just as they're getting on their feet a little bit in the "new normal"....
IRS decides now is a good time to release guidance saying, yeah, that PPP is essentially taxable now (expenses aren't deductible this year). So now, biz still has a big loan on their balance sheet. Let's see....with a PPP loan of lets say $100k that was used to pay employees....
they spent $108k in payroll & payroll taxes, + now they're going to pay income tax on that amount. Being conservative, let's say that's 30% (24% federal+6% state). Now they've received $100k to spend $138k to keep employees on payroll instead of sending them to unemployment.
And this is a conservative estimate. Finally, insult to injury.....all across the country (even #Iowa) shutdown mandates are being issued once again. So here's your tax bill, good luck paying that. #TaxTwitter #IRS #PPPFail @ChuckGrassley @SenJoniErnst @RepCindyAxne @hinsonashley
