Underwood Stands Up for Illinois Small Businesses Devastated by the Coronavirus Pandemic
WASHINGTON— This week, Congresswoman Lauren Underwood (IL-14) joined two bipartisan efforts calling for Congress to restore the tax deductibility of forgiven Paycheck Protection Program (PPP) loans for small businesses. Recent guidance from the IRS does not allow businesses to deduct expenses covered by a PPP loan from their federal taxes, violating congressional intent under the CARES Act and creating an undue burden on many of the nation’s small businesses. In a letter, Underwood and more than 170 Members of Congress urge House Leadership to compel the Trump administration to restore the deductibility of PPP loan expenses.
“PPP loans are meant to be a lifeline for small businesses and should not result in an unexpectedly high tax bill for businesses already struggling to keep their doors open. We must do everything to support them now and ensure they have a pathway to recovery once the pandemic is over,” said Underwood. “This is a bipartisan issue that we can come together to fix immediately; I urge Congressional leadership to include provisions in any end-of-year legislation requiring the Administration to restore the deductibility of PPP loans.”
Underwood strongly supported the passage of the Heroes Act, passed by the House in May and October, which included provisions to clarify that PPP expenses would be tax deductible. Additionally, on Monday, Underwood also joined a separate letter from 50 freshmen Members advocating for this critical fix.
Underwood has heard from small business owners in northern Illinois and local chambers of commerce who have shared the potentially devastating impacts if this guidance is not corrected.
“The small business community has been significantly impacted by COVID and should not be further penalized by what many believe was a technical error or misunderstanding of Congress’ intent. Loan forgiveness in this situation should not be considered a “recovery” nor a “reimbursement of expense” and if not corrected, this would reduce the intended benefit of PPP and put further financial strain on the already impacted business community. Let’s not put further burden on business owners who need this critical support,” said Jim Di Ciaula, President and CEO of the St. Charles Chamber of Commerce.
“Many small businesses are struggling and may not make it through the winter. Their situation will become even more perilous should they be unable to deduct payroll and other business expenses funded by PPP loans. We are thankful Congresswomen Underwood has been a strong and vocal advocate for passing legislation that will ensure expenses paid through PPP loans are deductible. This is the type of leadership the small business community needs during these difficult times,” said Elliot Richardson, Small Business Advocacy Council Co-Founder and President.
“Our local businesses are at their breaking point. We applaud Lauren Underwood and other members of Congress who recognize this gross oversight and their swift action to make adjustments to save our businesses from financial collapse,” said Kaylin Risvold, The Naperville Area Chamber of Commerce President and CEO.
“Congress cannot consider lost tax revenue as a concern when so many businesses are on the brink of failure. Businesses who will not survive this final crushing blow from government mandated shutdowns will represent a permanent loss in tax revenue, which will have a far more devastating effect on our economy than the short-term surrender of tax revenue from these loans,” Sean LaFortune, Wipfli Senior Tax Manager and certified public accountant.