The pandemic brought with it more than just a virus. The impact of policies and procedures meant to keep infection rates low created a challenge for individuals and businesses to maintain productivity and profitability. That’s why the Paycheck Protection Program Loan (PPP) was designed. But is this loan something the courts can use to determine alimony or child support payments in the future?
What is the PPP?
The Paycheck Protection Program or PPP is a forgivable emergency loan. It’s designed to protect paychecks so businesses and keep and rehire employees. If you spend the PPP loan on payroll, rent, mortgage interest, or utilities, the government will forgive the loan and it does not need to be paid back.
According to the IRS, without an exemption, forgiven loans are considered income for tax purposes. This is true regardless of the kind of debt. However, the forgiveness of the PPP loan is specifically exempted from taxes. So if you only looked at taxable income, you could not consider the PPP loan to be income for the purposes of child support or alimony in Georgia divorce or child custody cases.
Family Law Experts
This brings us to the reality of what a good family law attorney understands about the law. Taxable income is nice, and a good start, but real economics determine whether money received is income. If someone receives money, for free, as a substitute for business revenue or payroll, that money, in economic reality, is available for child support or alimony in divorce and child custody cases. Therefore, it should be added back into the revenue pool that determines profits and income.
Your Next Steps
It can quickly get complicated. If loans are not income, they shouldn’t be considered so for alimony or child support in Georgia divorce and child custody casts. But with the PPP loan forgiven, the game can change. That’s why you need an expert on your side to understand how all the puzzle pieces fit together.
Do you have more questions about the PPP loan and alimony or child support?
We are Georgia divorce and child custody attorneys. This is all we have done since 1995. We can help. If you need help or have any questions, we would be happy to speak with you via email, text, or phone. Check us out at www.shawlaw.com
Shaw Law Firm, PC
(770) 594-8309 (phone or text)