The IRS has announced
that lenders should not file information returns or provide statements to borrowers that report any qualifying loan forgiveness under the Paycheck Protection Program (PPP).
Section 6050P requires lenders and other applicable entities to report the discharge of debt of $600 or more on Form 1099-C, “Cancellation of Debt.” While canceled debt is generally taxable as income, the CARES Act provides that any loan amount ultimately forgiven under the PPP is excluded from gross income. The IRS is waiving the reporting requirements for PPP loan forgiveness to avoid confusing taxpayers and sending notices of underreporting.
National Managing Principal
Washington National Tax Office
+1 202 521 1515
Tax professional standards statement
This content supports Grant Thornton LLP’s marketing of professional services and is not written tax advice directed at the particular facts and circumstances of any person. If you are interested in the topics presented herein, we encourage you to contact us or an independent tax professional to discuss their potential application to your particular situation. Nothing herein shall be construed as imposing a limitation on any person from disclosing the tax treatment or tax structure of any matter addressed herein. To the extent this content may be considered to contain written tax advice, any written advice contained in, forwarded with or attached to this content is not intended by Grant Thornton LLP to be used, and cannot be used, by any person for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.
The information contained herein is general in nature and is based on authorities that are subject to change. It is not, and should not be construed as, accounting, legal or tax advice provided by Grant Thornton LLP to the reader. This material may not be applicable to, or suitable for, the reader’s specific circumstances or needs and may require consideration of tax and nontax factors not described herein. Contact Grant Thornton LLP or other tax professionals prior to taking any action based upon this information. Changes in tax laws or other factors could affect, on a prospective or retroactive basis, the information contained herein; Grant Thornton LLP assumes no obligation to inform the reader of any such changes. All references to “Section,” “Sec.,” or “§” refer to the Internal Revenue Code of 1986, as amended.