IRS Says PPP Loan Lenders Do Not Need To File Returns
September 28, 2020
The IRS announced last week banks who make loans that are later forgiven under the Paycheck Protection Program (PPP) do not need to file information returns with the IRS or borrowers.
This will save lenders and borrowers time and expenses and is meant to limit confusion.
Filing returns for forgiven PPP loans could lead to recipients mistakenly receiving IRS notices stating they have underreported their income.
Ordinarily debt that is forgiven becomes taxable income to the borrower, and the lender must submit a form to the IRS and to the borrower if the forgiven amount is $600 or more.