The IRS issued last week Revenue Ruling 2020-27 and Revenue Procedures 2020-51 -- both of which address when a borrower under the Paycheck Protection Program (PPP) should exclude PPP-eligible expenses as deductions in determining taxable income. Eligible expenses are those expenses used to obtain PPP loan forgiveness. In short, if there is a reasonable expectation of loan forgiveness, regardless of whether the borrower files a forgiveness application in 2020 or 2021 and of when the actual forgiveness event occurs, the expenses are non-deductible for year-end 2020. 

**Please note, the Consolidated Appropriation Act of 2021 contains additional COVID-19 relief provisions which, if passed, will impact PPP deductibility.