Currently Reading

Why Some Companies May See Hefty Tax Bills from PPP Loans

Advertisement
Coronavirus Resources and Information

Why Some Companies May See Hefty Tax Bills from PPP Loans


November 23, 2020
Payment protection program application
Photo: Vitalii Vodolazskyi

Some construction companies may receive large tax bills relating to Paycheck Protection Program loans, says the Internal Revenue Service. The IRS released guidance last week regarding tax implications for construction companies that plan to ask for PPP loan forgiveness, according to Construction Dive. A forgiven PPP loan is tax-exempt, but actually using the loan can reduce how much a company can write off on business taxes. And a loan is only forgivable if borrowers use a minimum of 60% for payroll costs and 40% for other costs such as rent and utilities.

Joseph Natarelli, leader of the national Construction Industry Practice group at accounting firm Marcum, told Construction Dive that many of his clients are considering not applying for PPP forgiveness in order to avoid a hefty tax bill.

“They’re saying, ‘If I knew then what I know now, then I wouldn't have taken the loan and I would have had to lay people off,’” he said.

The bottom line for contractors, Natarelli said, is to check with their accountants about tax implications before applying for loan forgiveness.

Read More

 

Related Stories

Market Data + Trends

Sellers, Buyers Increasingly Concerned About the Housing Market

Fannie Mae’s Home Purchase Sentiment Index dropped to the lowest level since May due to consumers’ increasingly pessimistic view on the housing…

Coronavirus Resources and Information

What’s Different About the Latest Round of PPP Loans

The most recent round of Paycheck Protection Program funding, which opened yesterday, comes with a few important differences. In order to combat…

Coronavirus Resources and Information

How COVID-19 Vaccines Will Change the Housing Market

Vaccines will not be the cure-all for the housing market’s problems, nor will it bring down the thriving market, says Realtor.com. With a bumpy…

Advertisement
Advertisement

More in Category




Advertisement
Advertisement

Create an account

By creating an account, you agree to Pro Builder's terms of service and privacy policy.


Daily Feed Newsletter

Get Pro Builder in your inbox

Each day, Pro Builder's editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Save the stories you care about

Lorem ipsum dolor sit amet lorem ipsum dolor sit amet lorem ipsum dolor sit amet.

The bookmark icon allows you to save any story to your account to read it later
Tap it once to save, and tap it again to unsave

It looks like you’re using an ad-blocker!

Pro Builder is an advertisting supported site and we noticed you have ad-blocking enabled in your browser. There are two ways you can keep reading:

Disable your ad-blocker
Disable now
Subscribe to Pro Builder
Subscribe
Already a member? Sign in
Become a Member

Subscribe to Pro Builder for unlimited access

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.