Farmers and ranchers should be able to reap more benefits from the Small Business Administration’s Paycheck Protection Program (PPP) with improvements made in the latest COVID-19 relief package.
The PPP was designed by Congress to help small businesses stay open and keep their employees on the payroll. Pat Wolff, senior director of congressional relations with the American Farm Bureau Federation said the program aided businesses to continue operating during the pandemic. “The way that it did that was to provide loans, and then forgive repayment if the loans were used for three things: wages, mortgages/rent, and utilities,” she said.
When Congress passed the PPP, Wolff says they were very clear that the loan amount would not be taxable. However, the Treasury Department took an unfortunately different position.
“They were going to deny tax deductions for expenses paid with those loans,” Wolff said. “So, in effect, they were canceling out Congress’s intent to provide those loans tax-free. And that is one thing that got fixed in the bill that passed last week and was signed into law by the president.”
Wolff adds that the COVID-19 relief bill also expanded the list of items that PPP loans can be used for.
“The COVID relief bill did one other thing that will be helpful to farmers, and that is it expanded the things that PPP loans can be used for. The bill added personal protective devices, so now, when a farm employer has to buy special gear or make accommodations for his workers to stay safe, you can use PPP loans for that and have the repayment forgiven.”