A recent guidance issued by the Internal Revenue Service and the US Treasury specifies that businesses may not deduct costs covered by Paycheck Protection Program loans if they expect their debt to ultimately be forgiven, a decision that stands to impact the 2020 tax filings of small business owners in particular. The recently released guidance provides new details for an earlier IRS decision that said normally tax-deductible items will no longer be deductible if they were paid for with PPP funds. The agency now specifically prohibits any small business that it says has a reasonable expectation of PPP loan forgiveness from deducting those expenses in its 2020 tax – even if it takes until 2021 or 2022 to reach actual forgiveness!