IRS Announcement 2020-12 — Information Reporting Requirements for PPP Loan Forgiveness

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Information Reporting Requirements for Paycheck Protection Program Loans Forgiven 
under the CARES Act 
 
 
 
 
Announcement 2020-12 
 
 
 
     This announcement notifies lenders that they should not file information returns or 
furnish payee statements under section 6050P of the Internal Revenue Code (Code) to 
report the amount of qualifying forgiveness with respect to covered loans made under 
the Paycheck Protection Program (PPP) administered by the Small Business 
Administration (SBA), in consultation with the Department of the Treasury, under Title I 
of the Coronavirus Aid, Relief, and Economic Security Act, Pub. L. No. 116-136, 
134 Stat. 281 (March 27, 2020), as amended by the Paycheck Protection Program 
Flexibility Act of 2020, Pub. L. No. 116-142, 134 Stat. 641 (June 5, 2020) (collectively, 
CARES Act).   
     Section 1102 of the CARES Act established the PPP, which allowed qualifying small 
businesses (eligible recipients) to obtain loans guaranteed by the SBA under 
section 7(a)(36) of the Small Business Act (15 U.S.C. § 636(a)(36)) (covered loans).  
Under section 1106 of the CARES Act, an eligible recipient is eligible for forgiveness of 
indebtedness for all or a portion of the stated principal amount of a covered loan if 
certain conditions are satisfied (qualifying forgiveness).  Under section 1106(i) of the 
CARES Act, for purposes of the Code, any amount that (but for section 1106(i)) would 

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be includible in gross income of the eligible recipient by reason of the qualifying 
forgiveness is excluded from gross income.  
     Generally, section 6050P of the Code and §§ 1.6050P-1 and 1.6050P-2 of the 
Income Tax Regulations require an applicable entity (as defined in section 6050P(c)(1) 
of the Code) that discharges at least $600 of a borrower’s indebtedness to file a 
Form 1099-C, Cancellation of Debt, with the Internal Revenue Service (IRS), and to 
furnish a payee statement to the borrower.  For purposes of this reporting requirement, 
§ 1.6050P-1(c) provides that “indebtedness” means any amount owed to an applicable 
entity, including stated principal, fees, stated interest, penalties, administrative costs, 
and fines. 
When all or a portion of the stated principal amount of a covered loan is forgiven 
because the eligible recipient satisfies the forgiveness requirements under section 1106 
of the CARES Act, an applicable entity is not required to, for federal income tax 
purposes only, and should not, file a Form 1099-C information return with the IRS or 
provide a payee statement to the eligible recipient under section 6050P of the Code as 
a result of the qualifying forgiveness.  The filing of such information returns with the IRS 
could result in the issuance of underreporter notices (IRS Letter CP2000) to eligible 
recipients, and the furnishing of such payee statements to eligible recipients could 
cause confusion.  This announcement is intended to prevent any such confusion. 
The principal author of this announcement is Marshall French of the Office of the 
Associate Chief Counsel (Procedure & Administration).  For further information 

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regarding this announcement, contact Marshall French at (202) 317-5411 (not a toll-free 
call).

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