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H.R. 6754House116th Congress (2019-2021)In Committee

Protecting the Paycheck Protection Program Act of 2020

Sponsored by Lizzie FletcherRep. Lizzie Fletcher (D-TX)
Introduced May 8, 2020

AI-Generated Summary

Updated April 14, 2026 at 12:10 PM UTC

The Protecting the Paycheck Protection Program Act of 2020 clarifies how expenses paid with PPP loan funds are treated for tax purposes. It says that businesses can deduct those expenses and determine the basis of property without considering the loan forgiveness exclusion, and it confirms that forgiven PPP loan amounts are not taxable income. The bill mainly affects businesses that received PPP loans and the Internal Revenue Code provisions that apply to them.

Key Provisions

  • Specifies that deductions and the basis of property for expenses paid with PPP loan proceeds are calculated without regard to the loan forgiveness exclusion.
  • Amends the CARES Act to state that forgiven PPP loan amounts are not included in a recipient’s gross income for tax purposes.

Legislative Activity

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1 earlier action
HouseIntro Referral Latest Action

Referred to the House Committee on Ways and Means.

Ways and Means Committee

May 8, 2020

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HouseIntro Referral

Introduced in House

May 8, 2020

HouseIntro Referral

Referred to the House Committee on Ways and Means.

Ways and Means Committee

May 8, 2020

Bill Text

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Introduced in HouseIssued May 8, 2020

I

116th CONGRESS

2d Session

H. R. 6754

IN THE HOUSE OF REPRESENTATIVES

May 8, 2020

Mrs. Fletcher (for herself, Ms. Craig, and Mr. Kim) introduced the following bill; which was referred to the Committee on Ways and Means

A BILL

To provide clarification regarding the tax treatment of expenses paid or incurred with proceeds from Paycheck Protection Program loans.

1.

Short title

This Act may be cited as the Protecting the Paycheck Protection Program Act of 2020.

2.

Clarification of tax treatment of expenses paid or incurred with proceeds from Paycheck Protection Program loans

(a)

In general

For purposes of the Internal Revenue Code of 1986 and notwithstanding any other provision of law, any deduction and the basis of any property shall be determined without regard to whether any amount is excluded from gross income under section 1106(i) of the CARES Act.

(b)

Clarification of exclusion of loan forgiveness

Section 1106(i) of the CARES Act is amended to read as follows:

(i)

Taxability

For purposes of the Internal Revenue Code of 1986, no amount shall be included in the gross income of the eligible recipient by reason of forgiveness of indebtedness described in subsection (b).

.

(c)

Effective date

Subsection (a) and the amendment made by subsection (b) shall take effect as if included in section 1106 of the CARES Act.