Newhouse legislation to provide tax relief to small businesses using PPP funds included in relief package

WASHINGTON, D.C. – Rep. Dan Newhouse (R-WA) released the following statement after voting to support the Senate Amendment to H.R. 133, the Consolidated Appropriations Act, which included the language of his legislation, H.R. 6884, the FIRST Act:

“The Paycheck Protection Program has served as a lifeline for small businesses throughout Central Washington and across the country, but business owners have expressed unease about the unintended tax consequences of this historic program,” said Rep. Newhouse. “This relief package includes language of a bill I introduced – the FIRST Act – that will ease these concerns by allowing businesses to continue taking tax deductions for ordinary business expenses. These funds were intended to help business owners, not tie their hands when they go to file their taxes for 2020. I am proud to have worked to include these clarifying provisions in the final bill.”

In May, Rep. Newhouse introduced the FIRST Act to reiterate congressional intent of the Paycheck Protection Program (PPP), allowing business owners who utilize PPP funds to continue to take tax deductions for ordinary business expenses.

The National Federation of Independent Businesses (NFIB) praised the inclusion of the FIRST Act and Rep. Newhouse’s leadership on behalf of small businesses:

“The Paycheck Protection Program (PPP) provided vital financial assistance to 107,660 Washingtonian small businesses. Unfortunately, IRS guidance limited the benefit of the PPP by prohibiting the deductibility of forgiven expenses. Congressman Newhouse stood up for small businesses and pressed for Congressional action to ensure struggling businesses would avoid surprise tax increases as they try to emerge from the pandemic. As a result of this advocacy, today’s legislation clarifies that forgiven PPP expenses are deductible – saving already-strained small businesses from an unexpected tax bill. NFIB appreciates Congressman Newhouse’s continued leadership to protect small businesses.” – Kevin Kuhlman, Vice President of Federal Government Relations, NFIB