SBA loans

Forum|Forum|5 years ago
March 8, 2021
7 replies
25 views

The SBA made loan payments for 6 months for a client. Everything I read online is dated to 10/2020 and says those payment made on their behalf will be taxable income. Has IRS come out since then to say this is not taxable income?

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sjrcpa

Level 15

The bill passed in late December made this tax free.

The more I know the more I don’t know.

S

SchlofAuthor

Level 3

I know PPP loans, and EIDL grants are tax free. But I have not read anything that gave the tax free status to the 6 months of the SBA micro loan payments made on behalf of the loan holders?

qbteachmt

Level 15

For Fed reporting: The SBA payments are tax free; the Interest still is deductible.

"Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, P.L. 116-136, the SBA is authorized to pay six months of principal, interest, and fees on covered SBA loans. The Consolidated Appropriations Act, 2021, P.L. 116-260, provides that these payments are not includible in the borrower’s gross income. In addition, Notice 2021-6, issued Jan. 19, waived Form 1099-MISC reporting requirements for these payments."

https://www.journalofaccountancy.com/news/2021/feb/irs-corrected-information-return-form-1099-misc.html

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