The federal Paycheck Protection Program was designed by Congress to help small businesses stay open and keep their employees on the payroll during the COVID-19 pandemic.
Pat Wolff, Senior Director of Congressional Relations with the American Farm Bureau, talks about how the program worked to keep businesses running.
“The way that it did that was to provide loans, and then forgive repayment if the loans were used for three things: wages, mortgages/rent, and utilities.”
Wolff says when Congress passed the PPP, they were clear the loan amount would not be taxable, but the Treasury Department took a different position.
“They were going to deny tax deductions for expenses paid with those loans, and so, in effect, they were canceling out Congress’s intent to provide those loans tax-free. And that is one thing that got fixed in the bill that passed last week and was signed into law by the president.”
Wolff says the COVID-19 relief bill also had another item that will benefit American farmers.
“The COVID relief bill did one other thing that will be helpful to farmers, and that is it expanded the things that PPP loans can be used for. The bill added personal protective devices, so now, when a farm employer has to buy special gear or make accommodations for his workers to stay safe, you can use PPP loans for that and have the repayment forgiven.”
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