Bankers Looking for IRS Clarification on PPP Reporting

WASHINGTON, DC – As Congress considers another round of stimulus and relief for businesses suffering through the COVID-19 shutdown, the American Bankers Association (ABA) is asking legislators to make a change in the tax code.

According to the ABA, any business recipient of the Paycheck Protection Program (PPP) receives forgiveness of the loan, thus making it a grant, will be liable for taxes at the end of the year. In the absence of an exception, banks may be required to report on Form 1099-C any amounts that are forgiven, thus generating “confusion and concern” among taxpayers who have been operating under the assumption that PPP debt forgiveness is non-taxable.

ABA also flagged several operational issues that would arise if Form 1099-C reporting is required, noting that banks would have to set up new systems and processes to capture and report the information.
(SOURCE: American Bankers Association)