(WAOW) – A major shock to businesses in Wisconsin and the country, as recipients of the federal paycheck protection program could be forced to pay higher taxes.

The program was originally intended to help companies continue to pay their employees and keep the lights on during the pandemic. According to Wisconsin Public Radio, the government would cancel the loan if the company was successful in doing so.

“These funds are to help these businesses survive,” said Kristine Hillmer, president of the Wisconsin Restaurants Association. “It doesn’t fill anyone’s pocket and it really helps them survive the pandemic.”

Now, a new Treasury Department and IRS ruling says these loans are, in fact, taxable.

If a business pays its expenses with the loan and the loan is canceled, the businesses will not be able to deduct those expenses from their taxes. In other words, businesses will pay more for things that would otherwise be exempt.

“If the original deal had been, we’re going to give you that money but we’re going to impose it on you, you might have seen a number of people say I just can’t afford to go down that road,” he said. Brandon said. Scholz, president of the Wisconsin Grocer’s Association.

Not only were the companies unaware of the capture, it appears that members of Congress who approved the plan were also unaware that it would be.

“The bottom line is that some of these companies are going to have to write a check to the government that they didn’t know they were going to have to write,” said John Schulze, director of legal and government affairs at Associated Builders and Contractors of Wisconsin.

There is not much to do before the introduction of new legislation. For now, companies are advised to anticipate what might happen.

“Really talk to their accountant about what’s best for them, short and long term,” Hillmer said.