PPP loan salary exp on Sch C

[tkwillson]

A PLC received a PPP loan. The PLC has one member and no other employees. Income is reported on 1040 Sch C and no 941 is filed. The PLC has paid the maximum lost income replacement of $20, 833 over 6 months ending in Dec, 2020 from the PPP loan proceeds. A loan forgiveness application has been filed. No other expenses were paid from the PPP loan. I know that the loan forgiveness is not taxable income. Question: Is the $20,833 also deductable as an expense on the 1040 Sch C?

[KathrynG3]

No, the loan cannot be recorded as an expense on Schedule C even though it was used for expenses.

For more information, see: How does a PPP loan affect my taxes?