From the Archive

The Potential Deductibility of Payroll Expenses Related to PPP Loans (May 2020)

A note from 2026

In May 2020 the IRS had just signaled that expenses paid with forgiven PPP funds would not be deductible — a position Congress later reversed by statute. This post captured the question mid-air. We preserve it as a record of advising through genuinely unsettled law.

The cannabis footnote that mattered more

Plant-touching cannabis businesses were excluded from PPP entirely due to federal status — so for most of our clients, the deductibility debate was academic while the exclusion itself was the real story. Ancillary businesses could and did participate, which made entity structure suddenly relevant to relief eligibility, a pattern worth remembering.

The durable lesson

Tax treatment of new federal programs is frequently unsettled at launch and resolved later — sometimes by the agency, sometimes by Congress overruling the agency. Positions taken during the uncertainty need documentation and, occasionally, amended returns after resolution. That is a permanent feature of practicing in a fast-moving policy environment, cannabis very much included.

This article is general information, not tax advice.