WASHINGTON, D.C. – Today, Rep. Dan Newhouse (R-WA) introduced H.R. 6884, the Fixing the Income Ramifications for Small Businesses and Tax Relief Act (FIRST Act) to provide relief to small businesses across the country who are utilizing Paycheck Protection Program (PPP) funding to remain resilient throughout the COVID-19 pandemic.
The FIRST Act reverses the guidance issued by the Internal Revenue Service which prevents companies from taking tax deductions for business expenses – including wages, rent, certain interest payments, and utilities – if the spending comes from PPP loans.
“In a short period of time, millions of people have lost their livelihoods due to no fault of their own,” said Rep. Newhouse. “As the federal government works to provide relief for the American people, we must ensure a real and efficient pathway forward for small businesses. After hearing from numerous small business owners in the 4th District, I authored The FIRST Act to allow business owners to utilize the Paycheck Protection Program to its full extent and restore the congressional intent of this funding: helping small businesses keep workers on the payroll and keep their lights on.”
Click here to read the full text of the bill.
The National Federation for Independent Businesses (NFIB) issued a statement of support for the legislation:
“When the IRS announced Notice 2020-32, which disallows small businesses the ability to deduct forgiven expenses, many NFIB members already applied for and received Paycheck Protection Program funding. Unfortunately, this belated regulatory decision changed the terms of the loan, limiting the benefits of the PPP and increasing complexity for small business owners. NFIB appreciates the FIRST Act reinforces the CARES Act’s congressional intent, making clear that forgiven expenses through the PPP should be treated as deductible business expenses. We commend Rep. Newhouse for recognizing this problem and introducing this legislation to remedy it,” said Kevin Kuhlman, NFIB Vice President, Federal Government Relations.