On Tuesday, September 22nd, the IRS released Announcement 2020-12, stating that lenders who make Paycheck Protection Program (PPP) loans are not required to file an information return or furnish a payee statement if all or a portion of the loan is later forgiven based on the borrower satisfying requirements of section 1106.
Under section 1106 of the CARES Act, a PPP loan may be forgiven if certain requirements are met by the borrower. The new announcement states that an institution is not required to “for federal income tax purposes only,” file Form 1099-C for funds that are forgiven. In addition, they are not to give the recipient a payee statement for forgiven amounts.
If you have questions regarding this update, please contact our Financial Institutions Group. We are always here to help.