"Can taxpayer deduct the interest remitted to the lender by the SBA?"

Again, we are reviewing forgiven PPP. That part between the lender and the SBA does not involve the borrower.

It might be helpful to consider that the forgiven amount would have been reported on 1099-C under typical operations, as the Borrowed amount forgiven. Not including the amount(s) to service the loan. The SBA is "underwriting" the loan, in other words.