Which of the following is not an eligible expense for tax purposes under the PPP?

The correct answer is that political campaign contributions are not an eligible expense for tax purposes under the Paycheck Protection Program (PPP). The PPP was designed to help small businesses retain their workforce and cover certain operating expenses during the COVID-19 pandemic. Eligible expenses typically include payroll costs, rent payments, and utility payments, all of which are necessary for maintaining business operations and supporting employees.

Payroll costs consist of wages, salaries, and other employee benefits, allowing businesses to keep their workers on the payroll. Rent payments are crucial as they help businesses cover their lease obligations for their physical locations. Utilities payments ensure that businesses can operate effectively by maintaining essential services such as electricity, heating, and water.

In contrast, political campaign contributions do not have a direct connection to the operational costs of running a business, and thus, they are excluded from the list of eligible expenses under the PPP. This exclusion emphasizes the intention of the program to focus on supporting businesses in a way that directly relates to their operational integrity and employee retention.