Introduction On December 27, 2020, President Trump signed the Consolidated Appropriations Act, 2021 (the Act), with certain provisions in the 5,593-page bill providing much needed relief to persons and entities suffering economic hardship from the COVID-19 pandemic. Certain provisions of Divisions M (Coronavirus Response and Relief Supplemental Appropriations Act, 2021), N (Additional Coronavirus Response and Relief) and EE (Taxpayer Certainty and Disaster Tax Relief Act of 2020) of the Act, among others, are the subject of this Alert. Paycheck protection program provisions Some of the more noteworthy provisions of the Act concern the Paycheck Protection Program (PPP) and the loans provided thereunder. Deductibility of PPP-Related Expenses. The Act clarifies that even though gross income does not include any amount that would otherwise arise from the forgiveness of a PPP loan, (i) deductions will be allowed for otherwise deductible expenses paid with the proceeds of a PPP loan that is forgiven, and (ii) tax attributes will not be reduced, and no basis increase will be denied, by reason of the loan forgiveness. This provision was enacted to override the IRS’s official position in Notice 2020-62 and Revenue Ruling 2020-27, which provided that no deductions would be allowed for expenses paid with forgiven PPP loan proceeds. This clarifying provision is retroactively effective to the date of enactment of the Coronavirus Aid, Relief, and Economic Security Act, P.L. 116-136 (CARES Act).